Editor's Note: On February 26 and 27, 2015, the Brookings Center for East Asia Policy Studies (CEAP) hosted a dialogue among China specialists from Japan and the United States in which the participants discussed their respective analyses of Chinese foreign and security policies. The rationale for such a dialogue is that it is in the interest of both countries to align their assessment of China as much as possible as the basis for a chief task of their alliance: managing the revival of China as a great power.

On December 18 and 19, 2014, CEAP sponsored a similar Japan-American dialogue on the Chinese economy and political system. Both the December and February dialogues included a public program, convened on December 19 and February 27. Video and audio recordings, complete transcripts, and some presentations from bothevents are available on the Brookings website.

That there should be a range of views on a country as diverse and complex as China should not be a surprise. Chinese themselves differ about their own country. American China specialists vary in their assessments, as do Japanese China specialists. Each analyst starts with his or her assumptions, biases, and methodologies. What was remarkable about the discussions in later February was the degree of overlap in the views of the Japanese and American scholars who participated.

Security Policy

In the public session on February 27, David Finkelstein of CNA’s China Studies Division presented a mainstream view of China’s national security policy. His major points were:

Internal and external security are at the top of Beijing’s policy agenda, with the same priority as economic development.

The priority accorded national security stems from the perception of a deteriorating domestic and foreign security environment, and a concern that the regime is not up to the challenges of coping effectively.

In this context, the key elements of China’s security strategy are to ensure the dominance of the CCP regime; enhance the regime’s capacity, including military capacity, to execute security policy; defend China’s sovereignty; and foster a positive peripheral environment.

With an unprecedented array of instruments of national power at its disposal, the Chinese leadership is using them in a proactive way to shape the Asian regional environment in China’s favor.

Transcending its past, the People’s Liberation Army (PLA) is acquiring the ability to defend China beyond its borders with naval, air, and missile forces (complementing the traditional emphasis on ground forces). The PLA is becoming a more significant actor in China’s decision-making circles. With civilian leaders, it is an institution that has progressively tackled areas for reform and improvement and will continue to do so.

Masafumi Iida of Japan’s National Institute of Defense Studies (NIDS) presented the counterpart analysis. In his view, China’s grand strategy is the “great rejuvenation of the Chinese nation,” which, among other things, would facilitate Chinese dominance in the Asian region. Security policy and a strong military contribute to that fundamental objective, even as it sometimes produces frictions with neighbors. The fundamental focus of China’s defense and security strategy is to pursue its “core national interests,” specifically the recovery of “lost territories” and the protection of maritime rights, executed through military modernization and strengthening power projection capabilities. A variety of factors fuel this security strategy: political, economic, institutional, military, plus interactions with China’s neighbors and the United States. Operationally, it has led to increasingly assertive and aggressive external activities and provocative behavior by the PLA.

The focus of PLA modernization lies in improving nuclear and conventional deterrence, improving its ability at sea and air control as well as amphibious and “far seas” operations. Countering U.S. intervention in a conflict requires a variety of capabilities, including missiles, space, and cyber.

Michael O’Hanlon of the Center for 21st Century Security and Intelligence at Brookings provided global context for these developments in China. He pointed out that China has both the world’s second largest economy and second largest military budget, and is undertaking the world’s most rapid program of military improvement. On the other hand, China’s military budget is about 1.5 percent of its GDP, placing China very much in the center of the world’s major countries by that measure. The United States military budget is 3.5 percent of its GDP, and the figure for Japan is about one percent. Most NATO members average about 1.4 or 1.5 percent. O’Hanlon argued that China’s increasing power would make it more assertive, but that even “China hasn’t quite figured out what that means. They haven’t quite figured out just how assertive they want to be.” They also haven’t figured out what costs they are willing to pay to achieve certain goals, such as the return of Taiwan or hegemony in the South China Sea and East China Sea. We are probably witnessing foreign policymaking by incrementalism and improvisation, as well as trail and error—not unlike what often happens in the United States, in fact. This situation, if true, is certainly preferable to the patient execution of a sinister grand strategy of conquest, but it may not be altogether safe and stabilizing either, depending on decisions made from Beijing to Tokyo to Washington to Manila to Hanoi and beyond.

Foreign Policy

Concerning Chinese foreign policy, Bonnie Glaser of the Center for Strategic and International Studies and other panelists agreed that the “rejuvenation of the Chinese nation” is the goal of China’s grand strategy. But that objective sometimes conflicts with the foreign policy task of ensuring a peaceful international environment and leads to mixed messages. Yet China’s goal is not, as some think, the ejection of the United States from the Pacific. However, it does seek to reduce U.S. influence and negate American alliances, even as it asks for restraint by others when it comes to China’s “core interests.” At the same time, it is taking initiatives to change the existing international order, not by attacking existing institutions but by creating new ones whose goals and norms are more to Chinese liking.

As China’s power has grown, its behavior has grown more assertive and proactive. It increasingly demands deference and accommodation from its smaller neighbors. Its foreign policy style has been both reactive and proactive, with the trend in the direction of the latter. There are both internal and external drivers for its recent actions. Public opinion, national security and law enforcement agencies, the actions of others, and assessments of the effect of China’s own actions all contribute to policy outcomes.

David Shambaugh of George Washington University supplemented Ms. Glaser’s presentation. He observed that China is conflicted concerning its global identities (plural) and its role in the world. As a result, its foreign policy exhibits a variety of emphases--sometimes accommodating, sometimes engaging actively, and sometimes domineering. A second consequence is that Beijing is ambivalent regarding its approach to the post-World War II international order. It has always been unhappy in a normative sense about that order, which finds expression in its attention to South-South relations. Looking forward, there are debates about whether it should continue to act pragmatically toward the existing order, as it has since the late 1970s, or try to alter or even overturn that order. Finally, despite China’s growing hard power, its soft power is mixed at best and is actually declining.

Akio Takahara of the University of Tokyo dwelt on the ambiguities in Chinese foreign policy, which reflect debates within China about its external direction. Should it be assertive or conciliatory in its basic stance? In the wake of the global financial crisis, should it reject a Washington-made, one-size-fits-all approach to world financial management and tout its “Beijing consensus,” or should it stick to the reformist path of privatization, liberalization, and balanced distribution of benefits? Should it heighten vigilance in response to the Obama administration’s “rebalance” initiative or should it stick with a more low-profile diplomacy, including the promotion of a “new pattern of big country relations”? Regarding Japan’s purchases of the Senkaku Islands from its private citizen, should China respond with suspicion and hostility or with moderation and understanding?

This ambivalence has been reflected in a pattern of “gentle words and tough deeds.” In its rhetoric concerning foreign policy in East Asia, it emphasizes conciliation and cooperation, but its actions over the last several years display assertiveness and provocation. Also driving this pattern is some inconsistency in Beijing’s long term goals (peace vs. regional dominance) and difficulties in policy coordination, both between agencies and concerning the use of foreign policy to foster national unity.

Rumi Aoyama of Waseda University concurred that there is a degree of inconsistency between China’s multiple foreign policy goals (e.g., fostering a favorable international environment vs. protecting sovereignty and maritime rights in the East and South China Seas). But she also stressed the evolutionary character of its foreign policy. For example, the scope of China’s foreign policy activism in its periphery has gradually expanded from its immediate neighborhood to regions like Central Asia, and its definition of “Asia” has expanded in the process. It relies on economic diplomacy in ways that it did not several decades ago (e.g., Asian Infrastructure Investment Bank, BRICS New Development Bank) and sees new opportunities for activism in the multilateral arena. Generally, Beijing has been more precise and assertive in defining and defending its international interests. These trends reflect not only an evolution in intentions but also in capacity to act on intentions.

The difference between these American and Japanese scholars then is one of emphasis, not one of fundamental outlook. A difference in emphasis among analysts should not be surprising, since China presents a multi-faceted external policy and utilizes a variety of instruments of national power, adjusting the mix of instruments to fit its perceptions of circumstances. Japan’s geopolitical position is different from the United States—if only because of the factor of distance. It is true, moreover, that there is a range of views within the China-watching communities of each country.

Several issues surfaced during the course of the discussions.

The first is the degree to which Chinese rhetoric about Chinese foreign and security policy is relevant to the actual conduct of policy. There is no question that there is much about China’s external behavior that is remote from what theoreticians say about policy (and sometimes the theory is merely post-hoc rationalization), that does not mean that rhetoric is totally irrelevant. Discussions of doctrine are a part of the policy-making process. Changes in specific formulations may signal changes in conduct. What is not said may be as important as what is said. And there is need for more studies of specific cases to determine whether and how rhetoric guides behavior.

A second issue is the role of factions in explaining Chinese foreign policy, particularly concerning Japan. Some Japanese analysts would place most or all of their emphasis on the factor of factions, but they are not a majority. One cannot say that factions are unimportant; they can be and sometimes are significant in struggles over policy. Concerning the explanation of China’s Japan policy, Japanese scholars tend to believe that factions were more important in the Hu Jintao era, and that his positive initiatives occurred when he was more powerful. American China specialists would place most emphasis on Beijing’s perception of its national interests, the role of institutions in policy-making, and on the behavior of other actors.

A third issue is the role of nationalism in China’s Japan policy. Both Americans and Japanese scholars agreed on several points of consensus. First of all, the PRC regime has fostered anti-Japanese sentiment for more than two decades, through the education system and the media. Second, the level of anti-Japanese elements in Chinese propaganda varies (stronger under Jiang Zemin than under Hu Jintao). Third, anti-Japanese sentiment among the public can turn into self-mobilized political action, in the form of physical attacks on Japanese entities in China and on Japanese websites. Fourth, the Chinese leadership regards these nationalistic outbursts as a double-edged sword that has tactical utility in putting Japan on the defensive, but they can also be used by protesters against the regime. Fifth, the regime has the power to close down mass protests, even those against Japan, and there are some issues on which protest has never been allowed (e.g., Taiwan).

Authors

Editor's Note: On February 26 and 27, 2015, the Brookings Center for East Asia Policy Studies (CEAP) hosted a dialogue among China specialists from Japan and the United States in which the participants discussed their respective analyses of Chinese foreign and security policies. The rationale for such a dialogue is that it is in the interest of both countries to align their assessment of China as much as possible as the basis for a chief task of their alliance: managing the revival of China as a great power.

On December 18 and 19, 2014, CEAP sponsored a similar Japan-American dialogue on the Chinese economy and political system. Both the December and February dialogues included a public program, convened on December 19 and February 27. Video and audio recordings, complete transcripts, and some presentations from bothevents are available on the Brookings website.

That there should be a range of views on a country as diverse and complex as China should not be a surprise. Chinese themselves differ about their own country. American China specialists vary in their assessments, as do Japanese China specialists. Each analyst starts with his or her assumptions, biases, and methodologies. What was remarkable about the discussions in later February was the degree of overlap in the views of the Japanese and American scholars who participated.

Security Policy

In the public session on February 27, David Finkelstein of CNA’s China Studies Division presented a mainstream view of China’s national security policy. His major points were:

Internal and external security are at the top of Beijing’s policy agenda, with the same priority as economic development.

The priority accorded national security stems from the perception of a deteriorating domestic and foreign security environment, and a concern that the regime is not up to the challenges of coping effectively.

In this context, the key elements of China’s security strategy are to ensure the dominance of the CCP regime; enhance the regime’s capacity, including military capacity, to execute security policy; defend China’s sovereignty; and foster a positive peripheral environment.

With an unprecedented array of instruments of national power at its disposal, the Chinese leadership is using them in a proactive way to shape the Asian regional environment in China’s favor.

Transcending its past, the People’s Liberation Army (PLA) is acquiring the ability to defend China beyond its borders with naval, air, and missile forces (complementing the traditional emphasis on ground forces). The PLA is becoming a more significant actor in China’s decision-making circles. With civilian leaders, it is an institution that has progressively tackled areas for reform and improvement and will continue to do so.

Masafumi Iida of Japan’s National Institute of Defense Studies (NIDS) presented the counterpart analysis. In his view, China’s grand strategy is the “great rejuvenation of the Chinese nation,” which, among other things, would facilitate Chinese dominance in the Asian region. Security policy and a strong military contribute to that fundamental objective, even as it sometimes produces frictions with neighbors. The fundamental focus of China’s defense and security strategy is to pursue its “core national interests,” specifically the recovery of “lost territories” and the protection of maritime rights, executed through military modernization and strengthening power projection capabilities. A variety of factors fuel this security strategy: political, economic, institutional, military, plus interactions with China’s neighbors and the United States. Operationally, it has led to increasingly assertive and aggressive external activities and provocative behavior by the PLA.

The focus of PLA modernization lies in improving nuclear and conventional deterrence, improving its ability at sea and air control as well as amphibious and “far seas” operations. Countering U.S. intervention in a conflict requires a variety of capabilities, including missiles, space, and cyber.

Michael O’Hanlon of the Center for 21st Century Security and Intelligence at Brookings provided global context for these developments in China. He pointed out that China has both the world’s second largest economy and second largest military budget, and is undertaking the world’s most rapid program of military improvement. On the other hand, China’s military budget is about 1.5 percent of its GDP, placing China very much in the center of the world’s major countries by that measure. The United States military budget is 3.5 percent of its GDP, and the figure for Japan is about one percent. Most NATO members average about 1.4 or 1.5 percent. O’Hanlon argued that China’s increasing power would make it more assertive, but that even “China hasn’t quite figured out what that means. They haven’t quite figured out just how assertive they want to be.” They also haven’t figured out what costs they are willing to pay to achieve certain goals, such as the return of Taiwan or hegemony in the South China Sea and East China Sea. We are probably witnessing foreign policymaking by incrementalism and improvisation, as well as trail and error—not unlike what often happens in the United States, in fact. This situation, if true, is certainly preferable to the patient execution of a sinister grand strategy of conquest, but it may not be altogether safe and stabilizing either, depending on decisions made from Beijing to Tokyo to Washington to Manila to Hanoi and beyond.

Foreign Policy

Concerning Chinese foreign policy, Bonnie Glaser of the Center for Strategic and International Studies and other panelists agreed that the “rejuvenation of the Chinese nation” is the goal of China’s grand strategy. But that objective sometimes conflicts with the foreign policy task of ensuring a peaceful international environment and leads to mixed messages. Yet China’s goal is not, as some think, the ejection of the United States from the Pacific. However, it does seek to reduce U.S. influence and negate American alliances, even as it asks for restraint by others when it comes to China’s “core interests.” At the same time, it is taking initiatives to change the existing international order, not by attacking existing institutions but by creating new ones whose goals and norms are more to Chinese liking.

As China’s power has grown, its behavior has grown more assertive and proactive. It increasingly demands deference and accommodation from its smaller neighbors. Its foreign policy style has been both reactive and proactive, with the trend in the direction of the latter. There are both internal and external drivers for its recent actions. Public opinion, national security and law enforcement agencies, the actions of others, and assessments of the effect of China’s own actions all contribute to policy outcomes.

David Shambaugh of George Washington University supplemented Ms. Glaser’s presentation. He observed that China is conflicted concerning its global identities (plural) and its role in the world. As a result, its foreign policy exhibits a variety of emphases--sometimes accommodating, sometimes engaging actively, and sometimes domineering. A second consequence is that Beijing is ambivalent regarding its approach to the post-World War II international order. It has always been unhappy in a normative sense about that order, which finds expression in its attention to South-South relations. Looking forward, there are debates about whether it should continue to act pragmatically toward the existing order, as it has since the late 1970s, or try to alter or even overturn that order. Finally, despite China’s growing hard power, its soft power is mixed at best and is actually declining.

Akio Takahara of the University of Tokyo dwelt on the ambiguities in Chinese foreign policy, which reflect debates within China about its external direction. Should it be assertive or conciliatory in its basic stance? In the wake of the global financial crisis, should it reject a Washington-made, one-size-fits-all approach to world financial management and tout its “Beijing consensus,” or should it stick to the reformist path of privatization, liberalization, and balanced distribution of benefits? Should it heighten vigilance in response to the Obama administration’s “rebalance” initiative or should it stick with a more low-profile diplomacy, including the promotion of a “new pattern of big country relations”? Regarding Japan’s purchases of the Senkaku Islands from its private citizen, should China respond with suspicion and hostility or with moderation and understanding?

This ambivalence has been reflected in a pattern of “gentle words and tough deeds.” In its rhetoric concerning foreign policy in East Asia, it emphasizes conciliation and cooperation, but its actions over the last several years display assertiveness and provocation. Also driving this pattern is some inconsistency in Beijing’s long term goals (peace vs. regional dominance) and difficulties in policy coordination, both between agencies and concerning the use of foreign policy to foster national unity.

Rumi Aoyama of Waseda University concurred that there is a degree of inconsistency between China’s multiple foreign policy goals (e.g., fostering a favorable international environment vs. protecting sovereignty and maritime rights in the East and South China Seas). But she also stressed the evolutionary character of its foreign policy. For example, the scope of China’s foreign policy activism in its periphery has gradually expanded from its immediate neighborhood to regions like Central Asia, and its definition of “Asia” has expanded in the process. It relies on economic diplomacy in ways that it did not several decades ago (e.g., Asian Infrastructure Investment Bank, BRICS New Development Bank) and sees new opportunities for activism in the multilateral arena. Generally, Beijing has been more precise and assertive in defining and defending its international interests. These trends reflect not only an evolution in intentions but also in capacity to act on intentions.

The difference between these American and Japanese scholars then is one of emphasis, not one of fundamental outlook. A difference in emphasis among analysts should not be surprising, since China presents a multi-faceted external policy and utilizes a variety of instruments of national power, adjusting the mix of instruments to fit its perceptions of circumstances. Japan’s geopolitical position is different from the United States—if only because of the factor of distance. It is true, moreover, that there is a range of views within the China-watching communities of each country.

Several issues surfaced during the course of the discussions.

The first is the degree to which Chinese rhetoric about Chinese foreign and security policy is relevant to the actual conduct of policy. There is no question that there is much about China’s external behavior that is remote from what theoreticians say about policy (and sometimes the theory is merely post-hoc rationalization), that does not mean that rhetoric is totally irrelevant. Discussions of doctrine are a part of the policy-making process. Changes in specific formulations may signal changes in conduct. What is not said may be as important as what is said. And there is need for more studies of specific cases to determine whether and how rhetoric guides behavior.

A second issue is the role of factions in explaining Chinese foreign policy, particularly concerning Japan. Some Japanese analysts would place most or all of their emphasis on the factor of factions, but they are not a majority. One cannot say that factions are unimportant; they can be and sometimes are significant in struggles over policy. Concerning the explanation of China’s Japan policy, Japanese scholars tend to believe that factions were more important in the Hu Jintao era, and that his positive initiatives occurred when he was more powerful. American China specialists would place most emphasis on Beijing’s perception of its national interests, the role of institutions in policy-making, and on the behavior of other actors.

A third issue is the role of nationalism in China’s Japan policy. Both Americans and Japanese scholars agreed on several points of consensus. First of all, the PRC regime has fostered anti-Japanese sentiment for more than two decades, through the education system and the media. Second, the level of anti-Japanese elements in Chinese propaganda varies (stronger under Jiang Zemin than under Hu Jintao). Third, anti-Japanese sentiment among the public can turn into self-mobilized political action, in the form of physical attacks on Japanese entities in China and on Japanese websites. Fourth, the Chinese leadership regards these nationalistic outbursts as a double-edged sword that has tactical utility in putting Japan on the defensive, but they can also be used by protesters against the regime. Fifth, the regime has the power to close down mass protests, even those against Japan, and there are some issues on which protest has never been allowed (e.g., Taiwan).

Authors

]]>
http://www.brookings.edu/blogs/order-from-chaos/posts/2015/03/27-china-gdp-indicator-power-bush?rssid=bushr{06D091A0-F4AA-4792-B30D-D1F2B38B7F21}http://webfeeds.brookings.edu/~/87764766/0/brookingsrss/experts/bushr~What-does-China-having-the-largest-GDP-meanWhat does China having the largest GDP mean?

In assessing swings in the balance of power, economic reductionism is tempting but very misleading. To be sure, countries with a large gross domestic product (GDP) sometimes convert some of those economic resources into military power, and sometimes they actually use that military power in ways that upset the existing order. But there is no inevitability here. To take a current example, just because China will soon have the largest GDP in the world does not necessarily mean that it will seek to overturn the East Asian status quo. What will be important are the choices that Chinese leaders make about how to use their country’s growing economic clout. (Note: these estimates are on a purchasing power parity basis, which many economists believe makes an economy bigger than it actually is. But that’s a topic for a future commentary.)

A historical example illuminates my point that choices are more important than gross rankings. The example is World War I, which created long-lasting chaos from relative order. According to the conventional narrative, August 1914 was the result of Germany’s challenge of Great Britain’s dominant position in the international system. Yet this narrative is at odds with the economic rankings at that time, as estimated by the late Angus Maddison, a prominent economic historian.

In 1913, the year before the outbreak of the war, it was the United States that had the world’s largest GDP, with just more than $500 billion in 1990 prices. Next, four countries were bunched together, each with $225 to $240 billion. Germany and Great Britain were in this group but so were Russia and, surprisingly, China. France was at $144 billion and Japan only had a GDP of $71 billion.

China’s second-tier economy is not surprising. In 1913, as today, it had the world’s largest population. More people can produce more stuff. But China then was also politically weak: divided internally and vulnerable to external imperialism.

The world today is very different from what it was a century ago, but the 1913 configuration is still instructive.

First of all, the 1913 rankings demonstrate that a large economy itself does not automatically translate into global political influence. In 1913, the United States may have had the world’s largest economy, but was virtually irrelevant in Europe’s gathering storm. Great Britain, on the other hand, “punched above its weight” to preserve stability in the international system.

Second, a large economy does not necessarily result in a robust military. The United States had a comparatively small military establishment in 1913, despite having the largest GDP. Relative to their economic size, Germany and Japan had large armies and navies.

Third, the emergence of a new economic Number One doesn’t mean that international conflict is inevitable. By 1913, the United States was the dominant power in the Western Hemisphere, but Great Britain accepted this decline in its global influence. Japan, on the other hand, had fought and won wars against two countries three times its economic size: China in 1894 to 1895 and Russia in 1904 to 1905. But Britain and the United States chose to accommodate Japan rather than challenge it, despite their commercial and colonial interests in East Asia.

Fourth, when conflict occurs, it is not necessarily because a rising power is bent on aggression. Germany’s decision to go to war in the summer of 1914 was driven by rigid alliance commitments and anxiety that Russia was growing stronger. Berlin opted to strike preemptively to preserve its security. Russia was caught in the same dilemma.

In short, the choices that major powers make are more important than their economic rank. As number one, China may assume that it has the right to extend its influence at the expense of others and act on its assumption. Its current expansion of its strategic perimeter in the East and South China seas is a case in point. Or it may continue to focus on its economy and create a prosperous life for most of its people, letting the United States continue to bear the burden of regional and international leadership. Or it can read the worst into what others do, particularly the United States, and act on its fears. Which choice China makes will have profound consequences for East Asia and the world.

The United States has choices too. It can regard becoming Number Two as another sign that of permanent decline and retreat from international leadership. It can choose to rebuild the pillars of national power that have been neglected—government finance, education, science and technology, and so on. It can conclude—without justification—that China is sure to become America’s adversary and base U.S. policy on that fear, producing a dangerous vicious circle. Or it can forgo the temptation to read the worst into China’s revival and instead seek to influence China’s trajectory in the direction of cooperation rather than conflict.

And for each country, not making conscious choices about its future direction is also a choice.

Editor's Note: An earlier version of this piece appeared at Yale Global.

Authors

In assessing swings in the balance of power, economic reductionism is tempting but very misleading. To be sure, countries with a large gross domestic product (GDP) sometimes convert some of those economic resources into military power, and sometimes they actually use that military power in ways that upset the existing order. But there is no inevitability here. To take a current example, just because China will soon have the largest GDP in the world does not necessarily mean that it will seek to overturn the East Asian status quo. What will be important are the choices that Chinese leaders make about how to use their country’s growing economic clout. (Note: these estimates are on a purchasing power parity basis, which many economists believe makes an economy bigger than it actually is. But that’s a topic for a future commentary.)

A historical example illuminates my point that choices are more important than gross rankings. The example is World War I, which created long-lasting chaos from relative order. According to the conventional narrative, August 1914 was the result of Germany’s challenge of Great Britain’s dominant position in the international system. Yet this narrative is at odds with the economic rankings at that time, as estimated by the late Angus Maddison, a prominent economic historian.

In 1913, the year before the outbreak of the war, it was the United States that had the world’s largest GDP, with just more than $500 billion in 1990 prices. Next, four countries were bunched together, each with $225 to $240 billion. Germany and Great Britain were in this group but so were Russia and, surprisingly, China. France was at $144 billion and Japan only had a GDP of $71 billion.

China’s second-tier economy is not surprising. In 1913, as today, it had the world’s largest population. More people can produce more stuff. But China then was also politically weak: divided internally and vulnerable to external imperialism.

The world today is very different from what it was a century ago, but the 1913 configuration is still instructive.

First of all, the 1913 rankings demonstrate that a large economy itself does not automatically translate into global political influence. In 1913, the United States may have had the world’s largest economy, but was virtually irrelevant in Europe’s gathering storm. Great Britain, on the other hand, “punched above its weight” to preserve stability in the international system.

Second, a large economy does not necessarily result in a robust military. The United States had a comparatively small military establishment in 1913, despite having the largest GDP. Relative to their economic size, Germany and Japan had large armies and navies.

Third, the emergence of a new economic Number One doesn’t mean that international conflict is inevitable. By 1913, the United States was the dominant power in the Western Hemisphere, but Great Britain accepted this decline in its global influence. Japan, on the other hand, had fought and won wars against two countries three times its economic size: China in 1894 to 1895 and Russia in 1904 to 1905. But Britain and the United States chose to accommodate Japan rather than challenge it, despite their commercial and colonial interests in East Asia.

Fourth, when conflict occurs, it is not necessarily because a rising power is bent on aggression. Germany’s decision to go to war in the summer of 1914 was driven by rigid alliance commitments and anxiety that Russia was growing stronger. Berlin opted to strike preemptively to preserve its security. Russia was caught in the same dilemma.

In short, the choices that major powers make are more important than their economic rank. As number one, China may assume that it has the right to extend its influence at the expense of others and act on its assumption. Its current expansion of its strategic perimeter in the East and South China seas is a case in point. Or it may continue to focus on its economy and create a prosperous life for most of its people, letting the United States continue to bear the burden of regional and international leadership. Or it can read the worst into what others do, particularly the United States, and act on its fears. Which choice China makes will have profound consequences for East Asia and the world.

The United States has choices too. It can regard becoming Number Two as another sign that of permanent decline and retreat from international leadership. It can choose to rebuild the pillars of national power that have been neglected—government finance, education, science and technology, and so on. It can conclude—without justification—that China is sure to become America’s adversary and base U.S. policy on that fear, producing a dangerous vicious circle. Or it can forgo the temptation to read the worst into China’s revival and instead seek to influence China’s trajectory in the direction of cooperation rather than conflict.

And for each country, not making conscious choices about its future direction is also a choice.

Editor's Note: An earlier version of this piece appeared at Yale Global.

Authors

]]>
http://www.brookings.edu/blogs/order-from-chaos/posts/2015/03/18-value-of-continuity-us-policy-in-asia-pacific?rssid=bushr{BDB71DC3-8205-4B74-98FF-2C78F484627A}http://webfeeds.brookings.edu/~/87214372/0/brookingsrss/experts/bushr~No-rebalance-necessary-The-essential-continuity-of-US-policy-in-the-AsiaPacificNo rebalance necessary: The essential continuity of U.S. policy in the Asia-Pacific

The recent Order from Chaos interview with U.S. Army Pacific Commander General Vincent Brooks is not just a useful perspective on the Asia-Pacific from an official responsible for the conduct of American policy. It is also an implicit but important response to ongoing discussions about the Obama administration’s approach policy toward Asia. The tenor of the public commentary has been that the administration’s “pivot” or “rebalance” marked a major shift in U.S. global policy, that its focus was military only, and that its goal was to contain China. General Brooks corrects those misimpressions.

First of all, he implicitly emphasized the continuity in U.S.-Asia policy. At least since the end of the Korean War in 1953, the United States has protected its own security by fostering security in the East Asian region. As former U.S. Secretary of Defense Robert Gates once said, "we are an Asian power." The key to this approach is presence: forward deployment of our military forces; a significant tempo of regional diplomatic activity (including helping Asian countries resolve disputes that they can’t resolve themselves); and promoting an agenda of political reform where it is appropriate. For six decades, therefore, Washington has worked to create and sustain the context in which Asian nations formulate their own policies. This is a challenging task. On the one hand, it requires Washington to deploy a mix of methods: deterrence, reassurance, partnering, and sometimes the use of force. On the other, the region itself is complex, combining a vestige of the Cold War (Korean peninsula), the twin dynamics of globalization, and regional economic integration, weak states, global issues like climate change, and now the revival of China as a great power. In the current context, the basic strategy that has served the United States well needs adjustment, and that is what the Obama administration’s rebalance was all about. But it is not a new strategy.

Second, to counter those who think that the rebalance is all about containing China, General Brooks takes a balanced approach to that country’s military modernization. He looks less at the amount of money China spends on defense than what it buys with that money. As he said, “The only capabilities that concern us [are those that make] China . . . capable of changing the status quo without coordination.” (By the way, when it comes to China’s military budgets, it has been basically flat in real terms and has consumed a fairly constant share of gross domestic product and government spending).

Third, General Brooks is still quite serious about the new security challenge that China poses East Asia. The areas of greatest concern are the waters of the East China Sea and the South China Sea. As China seeks to expand its security perimeter eastward and southward, there is the potential for clashes with the coast guards, fishing fleets, and navies of other countries, including the United States Navy. But General Brooks has an interesting approach to dealing with the real challenge that China poses: he emphasizes the importance of engaging China, and particularly the Chinese military. Not all of the issues that divide the two countries can be handled simply through dialogue and other tools of engagement but some can—factual misunderstandings, differences over how to achieve goals that we have in common, or failures of implementation. In each of these, dialogue can be very productive in narrowing differences. Even the management of conflicts of interest requires that Washington and Beijing talk to each other.

Finally, what General Brooks did not say was that the future success of the enduring American strategy in Asia depends on the renewed commitment of U.S. political leaders and the American public to it. This isn’t just a question of budgets, but the strategy cannot be sustained without robust funding. Maintaining forward military deployment costs a lot, and the possible resumption of sequestration is relevant here. Although the benefits of the U.S. presence in Asia are hard to calculate and impossible to quantify, they are substantial. If that presence is reduced, it will affect the calculations of allies and adversaries alike.

Authors

The recent Order from Chaos interview with U.S. Army Pacific Commander General Vincent Brooks is not just a useful perspective on the Asia-Pacific from an official responsible for the conduct of American policy. It is also an implicit but important response to ongoing discussions about the Obama administration’s approach policy toward Asia. The tenor of the public commentary has been that the administration’s “pivot” or “rebalance” marked a major shift in U.S. global policy, that its focus was military only, and that its goal was to contain China. General Brooks corrects those misimpressions.

First of all, he implicitly emphasized the continuity in U.S.-Asia policy. At least since the end of the Korean War in 1953, the United States has protected its own security by fostering security in the East Asian region. As former U.S. Secretary of Defense Robert Gates once said, "we are an Asian power." The key to this approach is presence: forward deployment of our military forces; a significant tempo of regional diplomatic activity (including helping Asian countries resolve disputes that they can’t resolve themselves); and promoting an agenda of political reform where it is appropriate. For six decades, therefore, Washington has worked to create and sustain the context in which Asian nations formulate their own policies. This is a challenging task. On the one hand, it requires Washington to deploy a mix of methods: deterrence, reassurance, partnering, and sometimes the use of force. On the other, the region itself is complex, combining a vestige of the Cold War (Korean peninsula), the twin dynamics of globalization, and regional economic integration, weak states, global issues like climate change, and now the revival of China as a great power. In the current context, the basic strategy that has served the United States well needs adjustment, and that is what the Obama administration’s rebalance was all about. But it is not a new strategy.

Second, to counter those who think that the rebalance is all about containing China, General Brooks takes a balanced approach to that country’s military modernization. He looks less at the amount of money China spends on defense than what it buys with that money. As he said, “The only capabilities that concern us [are those that make] China . . . capable of changing the status quo without coordination.” (By the way, when it comes to China’s military budgets, it has been basically flat in real terms and has consumed a fairly constant share of gross domestic product and government spending).

Third, General Brooks is still quite serious about the new security challenge that China poses East Asia. The areas of greatest concern are the waters of the East China Sea and the South China Sea. As China seeks to expand its security perimeter eastward and southward, there is the potential for clashes with the coast guards, fishing fleets, and navies of other countries, including the United States Navy. But General Brooks has an interesting approach to dealing with the real challenge that China poses: he emphasizes the importance of engaging China, and particularly the Chinese military. Not all of the issues that divide the two countries can be handled simply through dialogue and other tools of engagement but some can—factual misunderstandings, differences over how to achieve goals that we have in common, or failures of implementation. In each of these, dialogue can be very productive in narrowing differences. Even the management of conflicts of interest requires that Washington and Beijing talk to each other.

Finally, what General Brooks did not say was that the future success of the enduring American strategy in Asia depends on the renewed commitment of U.S. political leaders and the American public to it. This isn’t just a question of budgets, but the strategy cannot be sustained without robust funding. Maintaining forward military deployment costs a lot, and the possible resumption of sequestration is relevant here. Although the benefits of the U.S. presence in Asia are hard to calculate and impossible to quantify, they are substantial. If that presence is reduced, it will affect the calculations of allies and adversaries alike.

Authors

]]>
http://www.brookings.edu/events/2015/02/27-china-security-foreign-policy-us-japan-perspectives?rssid=bushr{2939004D-7DDC-4675-AEE0-1259C9621D2A}http://webfeeds.brookings.edu/~/86057052/0/brookingsrss/experts/bushr~Chinas-security-and-foreign-policies-Comparing-American-and-Japanese-perspectivesChina's security and foreign policies: Comparing American and Japanese perspectives

Event Information

As China’s economic power has grown, its foreign policy has evolved. It now has greater political influence in regional and global affairs, and is increasingly seeking the exercise that influence. This evolution in China’s role in the world will impact the United States and Japan, two close allies. Understanding the character and trajectory of a reviving China is a crucial task for Washington and Tokyo, which is made more complicated by a plurality of views on China in and between the two allies.

On February 27, the Center for East Asia Policy Studies hosted a seminar examining American and Japanese interpretations of China’s security and foreign policies. In two sessions, leading China specialists from the United States and Japan examined factors that may drive China’s policies, including domestic and institutional politics, increasing resources and capacities, and actions of other countries. They analyzed China’s approaches to countries in East Asia and outside the region. Panel moderators and participants analyzed the policy implications of gaps in interpretation.

Event Information

As China’s economic power has grown, its foreign policy has evolved. It now has greater political influence in regional and global affairs, and is increasingly seeking the exercise that influence. This evolution in China’s role in the world will impact the United States and Japan, two close allies. Understanding the character and trajectory of a reviving China is a crucial task for Washington and Tokyo, which is made more complicated by a plurality of views on China in and between the two allies.

On February 27, the Center for East Asia Policy Studies hosted a seminar examining American and Japanese interpretations of China’s security and foreign policies. In two sessions, leading China specialists from the United States and Japan examined factors that may drive China’s policies, including domestic and institutional politics, increasing resources and capacities, and actions of other countries. They analyzed China’s approaches to countries in East Asia and outside the region. Panel moderators and participants analyzed the policy implications of gaps in interpretation.

Transcript

Event Materials

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http://www.brookings.edu/blogs/order-from-chaos/posts/2015/02/26-if-america-leads-will-anyone-follow-bush?rssid=bushr{CE870A8A-F2E6-4F3D-81ED-8A37CF3826EC}http://webfeeds.brookings.edu/~/86038357/0/brookingsrss/experts/bushr~If-America-leads-will-anyone-followIf America leads, will anyone follow?At this point in world history, the chances for constructing a stable international order without the leadership of the United States are probably pretty low. That is not to say that other major powers might emerge to provide the centrality that America has since 1945. Nor does it mean that American leadership has been perfect (it has not), or that the world may assume that the United States is prepared to remain “indispensable” (it should not).

Yet, even if the United States is still willing and able to lead, and even if other major powers accept that it does so, Washington will likely confront the growing problem of followership. President Obama made clear in his 2014 West Point speech that future interventions by the United States in overseas conflicts will be a function of the willingness of “partners” to lend a hand. In fact, Washington has always depended to some extent on other nations to supplement its efforts, but the question for the future is whether this operating principle remains feasible. The experience of the last fifteen years illustrates the limits of followership for American leadership.

In fact, there are a couple of different kinds of followers at play. The first type is made up of treaty allies and countries whose interests and values overlap to some extent with ours. The United States has been fortunate that it has been able to enlist at least some of them in our twenty-first century missions, including in Iraq, Afghanistan, Iraq again, humanitarian disasters, and so on.

Yet officials in both the Bush and Obama Administrations are all too aware of the difficulty of encouraging followership by allies and friends. Their interests and values may overlap with those of the United States, but they are not identical. The resources they have available to contribute to our causes do not necessarily come in the types and amounts that make more than a symbolic difference. Their publics do not always support American goals, or the idea of hitching their country’s wagon to our star. Some of our friends and allies would just as soon free-ride on American efforts while they provide token assistance. Other countries conclude that their friendship with the United States and the commitment that we make to their security frees them to take risks against third parties that they would otherwise not take.

The way the Bush Administration managed its putative followers before and during its invasion and occupation of Iraq is an extreme object lesson in how not to encourage quality followership. Still other cases readily come to mind to illustrate the difficulties of getting our friends to follow the leader.

The other type of followers consists of countries that the United States seeks to assist as part of a larger cause, but which are insufficiently willing to help themselves. Specifically, their leaders cannot or will not build the state capacity necessary to defend borders, foster domestic security, provide essential services to the population, establish a rule of law, contain social conflict, combat corruption, and promote economic and social modernization. None of these tasks is easy, but each is necessary if the country is to survive more or less on its own. And how to address each of these tasks is not a mystery: they require resources, particularly human resources; formulation of policies that are appropriate to circumstances; and sufficient authority and autonomy to guard institutions against forces that inevitably will try to capture them for their own rent-seeking benefit.

Note that strictly speaking, this is not nation-building, an activity to which some Americans have a serious allergy. It is state-building, which is probably a prerequisite to creating a successful nation. Nor is democratization the same as state-building. Indeed, fostering formal democracy in advance of building the state only ensures that existing political forces are able to undermine the emergence of a strong state.

The point here is that it is very difficult for the United States to assist a country that is not able to work hard to create state capacity. The leaders of Ukraine had two decades to do state-building but chose instead to keep the state weak in order to enrich themselves and others. As a result, it lacks armed forces that are able to deter and defend Russian aggression. The rulers of Afghanistan have failed to use the time available since the fall of the Taliban to build an effective state, creating the real risk of a civil war against a revived Taliban. Again, the chief negative example is Iraq, where the United States blindly dismantled the Iraqi military and pursued de-Baathification, to the point that the Iraqi state is today much weaker than it needs to be. Even so, Iraqi leaders failed to take their own initiative to strengthen their country.

The problem of followership has bedeviled American foreign policy since World War II. Coping with the problems of free-riding and blank checks in alliances or quasi-alliances is an inherent problem in those relationships. Yet, on balance, the United States handled the dilemmas pretty well. On the other hand, the issue of weak and dependent states has been consistently hard to address.

Several prime examples come immediately to mind: Chiang Kai-shek’s China in the late 1940s; El Salvador in the 1980s; and Iraq, Afghanistan and some Eastern European countries in the 2000s. It is not all a record of failure: Japan, Germany, Taiwan, South Korea, and Poland are all rather successful. Nor is Washington utterly blameless; far from it. At the end of the day, however, if leaders of weak countries are not willing to do the hard work of self-strengthening, as was the case in every success story, there are limits to what the United States can do. Leading is difficult when followers are too weak to tag along.

Authors

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Thu, 26 Feb 2015 16:30:00 -0500Richard C. Bush IIIAt this point in world history, the chances for constructing a stable international order without the leadership of the United States are probably pretty low. That is not to say that other major powers might emerge to provide the centrality that America has since 1945. Nor does it mean that American leadership has been perfect (it has not), or that the world may assume that the United States is prepared to remain “indispensable” (it should not).

Yet, even if the United States is still willing and able to lead, and even if other major powers accept that it does so, Washington will likely confront the growing problem of followership. President Obama made clear in his 2014 West Point speech that future interventions by the United States in overseas conflicts will be a function of the willingness of “partners” to lend a hand. In fact, Washington has always depended to some extent on other nations to supplement its efforts, but the question for the future is whether this operating principle remains feasible. The experience of the last fifteen years illustrates the limits of followership for American leadership.

In fact, there are a couple of different kinds of followers at play. The first type is made up of treaty allies and countries whose interests and values overlap to some extent with ours. The United States has been fortunate that it has been able to enlist at least some of them in our twenty-first century missions, including in Iraq, Afghanistan, Iraq again, humanitarian disasters, and so on.

Yet officials in both the Bush and Obama Administrations are all too aware of the difficulty of encouraging followership by allies and friends. Their interests and values may overlap with those of the United States, but they are not identical. The resources they have available to contribute to our causes do not necessarily come in the types and amounts that make more than a symbolic difference. Their publics do not always support American goals, or the idea of hitching their country’s wagon to our star. Some of our friends and allies would just as soon free-ride on American efforts while they provide token assistance. Other countries conclude that their friendship with the United States and the commitment that we make to their security frees them to take risks against third parties that they would otherwise not take.

The way the Bush Administration managed its putative followers before and during its invasion and occupation of Iraq is an extreme object lesson in how not to encourage quality followership. Still other cases readily come to mind to illustrate the difficulties of getting our friends to follow the leader.

The other type of followers consists of countries that the United States seeks to assist as part of a larger cause, but which are insufficiently willing to help themselves. Specifically, their leaders cannot or will not build the state capacity necessary to defend borders, foster domestic security, provide essential services to the population, establish a rule of law, contain social conflict, combat corruption, and promote economic and social modernization. None of these tasks is easy, but each is necessary if the country is to survive more or less on its own. And how to address each of these tasks is not a mystery: they require resources, particularly human resources; formulation of policies that are appropriate to circumstances; and sufficient authority and autonomy to guard institutions against forces that inevitably will try to capture them for their own rent-seeking benefit.

Note that strictly speaking, this is not nation-building, an activity to which some Americans have a serious allergy. It is state-building, which is probably a prerequisite to creating a successful nation. Nor is democratization the same as state-building. Indeed, fostering formal democracy in advance of building the state only ensures that existing political forces are able to undermine the emergence of a strong state.

The point here is that it is very difficult for the United States to assist a country that is not able to work hard to create state capacity. The leaders of Ukraine had two decades to do state-building but chose instead to keep the state weak in order to enrich themselves and others. As a result, it lacks armed forces that are able to deter and defend Russian aggression. The rulers of Afghanistan have failed to use the time available since the fall of the Taliban to build an effective state, creating the real risk of a civil war against a revived Taliban. Again, the chief negative example is Iraq, where the United States blindly dismantled the Iraqi military and pursued de-Baathification, to the point that the Iraqi state is today much weaker than it needs to be. Even so, Iraqi leaders failed to take their own initiative to strengthen their country.

The problem of followership has bedeviled American foreign policy since World War II. Coping with the problems of free-riding and blank checks in alliances or quasi-alliances is an inherent problem in those relationships. Yet, on balance, the United States handled the dilemmas pretty well. On the other hand, the issue of weak and dependent states has been consistently hard to address.

Several prime examples come immediately to mind: Chiang Kai-shek’s China in the late 1940s; El Salvador in the 1980s; and Iraq, Afghanistan and some Eastern European countries in the 2000s. It is not all a record of failure: Japan, Germany, Taiwan, South Korea, and Poland are all rather successful. Nor is Washington utterly blameless; far from it. At the end of the day, however, if leaders of weak countries are not willing to do the hard work of self-strengthening, as was the case in every success story, there are limits to what the United States can do. Leading is difficult when followers are too weak to tag along.

Authors

]]>
http://www.brookings.edu/events/2015/02/06-chinas-rise-and-us-defense?rssid=bushr{4B998166-6DE3-46C2-82B6-7E8C856469D3}http://webfeeds.brookings.edu/~/84814548/0/brookingsrss/experts/bushr~China%e2%80%99s-Rise-Implications-for-US-National-Security-and-the-Defense-BudgetChina’s Rise: Implications for U.S. National Security and the Defense Budget

Event Information

China’s rise constitutes one of the great historical events of our time, and its implications for U.S. national security strategy and the U.S. defense budget remain key issues in Washington, as they surely will well into the future. Critical areas to explore include progress that China has made and challenges it has encountered in its economic and military development, as well as the effects of its rise on the region. These changes will likely have ramifications for the United States and its military, as President Obama’s “rebalance” strategy moves into its fourth year.

On February 6, the Center for 21st Century Security and Intelligence (21CSI) hosted a discussion comprised of a group with expertise ranging from regional security matters to U.S. military policy to China’s economy. Panelists included Brookings Center for East Asia Policy Studies Director Richard Bush, Bernard Cole of the National War College, and David Dollar, senior fellow in the John L. Thornton China Center at Brookings. Michael O’Hanlon, co-director of 21CSI, moderated the discussion.

Event Information

China’s rise constitutes one of the great historical events of our time, and its implications for U.S. national security strategy and the U.S. defense budget remain key issues in Washington, as they surely will well into the future. Critical areas to explore include progress that China has made and challenges it has encountered in its economic and military development, as well as the effects of its rise on the region. These changes will likely have ramifications for the United States and its military, as President Obama’s “rebalance” strategy moves into its fourth year.

On February 6, the Center for 21st Century Security and Intelligence (21CSI) hosted a discussion comprised of a group with expertise ranging from regional security matters to U.S. military policy to China’s economy. Panelists included Brookings Center for East Asia Policy Studies Director Richard Bush, Bernard Cole of the National War College, and David Dollar, senior fellow in the John L. Thornton China Center at Brookings. Michael O’Hanlon, co-director of 21CSI, moderated the discussion.

Audio

Transcript

Event Materials

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http://www.brookings.edu/research/articles/2015/01/27-american-japanese-view-china-bush?rssid=bushr{9EF8F13E-9BC9-4334-964D-ADA7D63AEBC7}http://webfeeds.brookings.edu/~/84217032/0/brookingsrss/experts/bushr~American-and-Japanese-scholars-view-China%e2%80%99s-economy-and-politicsAmerican and Japanese scholars view China’s economy and politics

Editor's Note: On December 18 and 19, 2014, the Brookings Center for East Asia Policy Studies (CEAP) hosted a dialogue among China specialists from Japan and the United States in which the participants discussed their respective analyses of the Chinese economy and political system. The rationale for such a dialogue is that it is in the interest of both countries to align their assessment of China as much as policy as the basis for a chief task of their alliance: managing the revival of China as a great power.

One part of that dialogue was a public program, convened on the morning of December 19. Video and audio recordings, a complete transcript, and some presentations from the event are available on the Brookings website.

Not surprisingly, in both the United States and Japan, there is a range of views about China and all its aspects. Depending on which aspect is being considered, the range of interpretation will vary both within each group of China specialists and also between them. So some differences are to be expected; the question is the source of those differences.

The Economy

On the Chinese economy, there was very little difference between American and Japanese specialists. There was general agreement that:

In our discussions, there was general agreement that the emergence of the Chinese economy was beneficial to the American, Japanese, and other economies. Tomoo Marukawa of the University of Tokyo pointed out that the view from Japan is nuanced. On the one hand, many political and business leaders understand that the growth of the Chinese economy is beneficial to the Japanese economy. But there is also a sense of fear and envy of China's economic rise among the Japanese people. Fear, because they assume a connection between China's economic rise and China's assertiveness in diplomacy and military expansion. Envy, because China has taken over Japan's position as the second largest economy in the world. Pessimistic views on the future of the Chinese economy are very popular in Japan, in part because they can ease such fear and envy.

Participants agreed that the Chinese model of export-led growth had reached the limits of its utility and had to be replaced by a different approach, one that emphasizes domestic demand and innovation, and includes measures for financial liberalization, greater exchange-rate flexibility, relaxation of restrictions on movement of people, and opening the service sector to external investment and competition.

There was also broad agreement that the Chinese leadership clearly recognizes the need for such policy reform and has focused on the right areas. It is prepared to accept the lower rates of growth that a new model will entail.

Finally, there was an appreciation of the fact that progress in carrying out reform is difficult. Three challenges stood out as particularly important:

Overcoming the resistance of central state-owned enterprises (SOEs) will be a significant challenge, since they benefit from the status quo.

It will be necessary to change the incentives to which local officials respond, away from a single-minded obsession with growth.

Strengthening the rule of law is a precondition for ensuring the central role of the market. The general focus of the decisions of the Fourth Plenum of the Central Committee in November 2014 is correct, even if the details were disappointing.

There is some debate among specialists concerning the weight and role of state-owned enterprises (SOEs) in the economy. The conventional wisdom is that they enjoy a privileged position. A recent publication by Nicholas Lardy (Peterson Institute for International Economics), assembles significant evidence to support the hypothesis that the private sector has been and will be the driver of economic growth. Skeptics note that even if state-owned firms have contributed less to China’s growth than private ones, they still receive preferential support from the state, which has a distorting effect. In our public session, Tomoo Marukawa noted the beginning of an increase of SOE assets as a percentage of China’s GDP which began in 2009, reversing a previous declining trend. Another participant noted a distinction between “reform” of the domestic economy and “opening up” externally. The direction of the former is positive but the treatment of foreign firms is not.

The Political System

The range of disagreement appears to be greater regarding the political system. The disagreement is not really between Japanese and American China experts. It is more among scholars in each country regarding which aspect of Chinese politics – for example elite politics, center vs. local, or bureaucratic interests – is most significant for understanding political outcomes and the system as a whole. Of course, between Japanese and American scholars there may be, and probably is, a difference between how much weight to give each factor. It appears that on balance Japanese scholars give more weight to elite politics than their American counterparts.

In this regard, Professor Akio Takahara of the University of Tokyo observed that there were two principal schools of thought concerning politics at the Center, each focusing on a different aspect of the system. On the one hand, the “institution school” sees high-level politics through institutions. On the other, the “power struggle school” emphasizes power struggle. As he said, “reality could be somewhere in between.” Political actors can contend for power through and around institutions, and institutions can better carry out their mission if they increase their relative power. Moreover, individual power-holders may use their control of institutional positions to increase their personal wealth and power (corruption), and so degrading the autonomy, coherence, and effectiveness of institutions.

By extension, there are other aspects of the system which, in tandem with institutions and power struggle, enrich our understanding.

The first is the mode of policy implementation. One is bureaucratic routine, according to regulations, norms, guidelines, and supervision. The other is through political campaigns, which seek to carry out goals through mobilization, intervention in the normal work of institutions, and some degree of intimidation. Campaigns occurred frequently during Mao Zedong’s rule, but they did not disappear after his death (the one-child-per-family campaign that began in the 1980s and the anti-corruption campaign today are examples), but the shift to a more reformist approach to the substance and implementation of policy is clear.

The second aspect is relations among different administrative levels (the center, provinces, cities, counties and township). These have been stable over recent decades, and sub-central local officials have had significant authority, autonomy vis-a-vis higher levels, opportunities for personal enrichment, clear policy goals (mainly stimulating economic growth and assuring social stability), and clear metrics of performance. The reforms formulated by Xi Jinping clearly change policy objectives but as yet lack criteria for measuring performance. Thus, the sustained implementation of the reforms is not assured, with potential consequences for the authority and autonomy of officials at each level. In addition, the anti-corruption campaign is highly disruptive, because it is a campaign and threatens to reduce opportunities for rent-seeking.

The third aspect is relations between state and society, which for most sectors and over time were liberalized considerably after the beginning of reform in 1979. The trends in the Xi Jinping period appear to be mixed. On the one hand, if effectively implemented, economic reforms will remedy the worst negative consequences of the political economy of the reform period, and a strengthening of the legal system will similarly provide channels for correcting abuse of power. On the other hand, restrictions on political activity, always tight, have been tightened further. In addition, the definition of what is political has been expanded.

There is general agreement that Xi Jinping has consolidated his power more quickly than his predecessors, and has more personal decision-making power than they did, as highlighted by Tomoki Kamo of Keio University. There are differences on whether this is because he and his leadership colleagues are insecure and need to suppress public alienation and dissent, or because such consolidation is a prerequisite for a vigorous reform effort (or both). Concentration of power, and initiatives like the anti-corruption campaign, have the side-effect of reducing feedback to the center.

Authors

Editor's Note: On December 18 and 19, 2014, the Brookings Center for East Asia Policy Studies (CEAP) hosted a dialogue among China specialists from Japan and the United States in which the participants discussed their respective analyses of the Chinese economy and political system. The rationale for such a dialogue is that it is in the interest of both countries to align their assessment of China as much as policy as the basis for a chief task of their alliance: managing the revival of China as a great power.

One part of that dialogue was a public program, convened on the morning of December 19. Video and audio recordings, a complete transcript, and some presentations from the event are available on the Brookings website.

Not surprisingly, in both the United States and Japan, there is a range of views about China and all its aspects. Depending on which aspect is being considered, the range of interpretation will vary both within each group of China specialists and also between them. So some differences are to be expected; the question is the source of those differences.

The Economy

On the Chinese economy, there was very little difference between American and Japanese specialists. There was general agreement that:

In our discussions, there was general agreement that the emergence of the Chinese economy was beneficial to the American, Japanese, and other economies. Tomoo Marukawa of the University of Tokyo pointed out that the view from Japan is nuanced. On the one hand, many political and business leaders understand that the growth of the Chinese economy is beneficial to the Japanese economy. But there is also a sense of fear and envy of China's economic rise among the Japanese people. Fear, because they assume a connection between China's economic rise and China's assertiveness in diplomacy and military expansion. Envy, because China has taken over Japan's position as the second largest economy in the world. Pessimistic views on the future of the Chinese economy are very popular in Japan, in part because they can ease such fear and envy.

Participants agreed that the Chinese model of export-led growth had reached the limits of its utility and had to be replaced by a different approach, one that emphasizes domestic demand and innovation, and includes measures for financial liberalization, greater exchange-rate flexibility, relaxation of restrictions on movement of people, and opening the service sector to external investment and competition.

There was also broad agreement that the Chinese leadership clearly recognizes the need for such policy reform and has focused on the right areas. It is prepared to accept the lower rates of growth that a new model will entail.

Finally, there was an appreciation of the fact that progress in carrying out reform is difficult. Three challenges stood out as particularly important:

Overcoming the resistance of central state-owned enterprises (SOEs) will be a significant challenge, since they benefit from the status quo.

It will be necessary to change the incentives to which local officials respond, away from a single-minded obsession with growth.

Strengthening the rule of law is a precondition for ensuring the central role of the market. The general focus of the decisions of the Fourth Plenum of the Central Committee in November 2014 is correct, even if the details were disappointing.

There is some debate among specialists concerning the weight and role of state-owned enterprises (SOEs) in the economy. The conventional wisdom is that they enjoy a privileged position. A recent publication by Nicholas Lardy (Peterson Institute for International Economics), assembles significant evidence to support the hypothesis that the private sector has been and will be the driver of economic growth. Skeptics note that even if state-owned firms have contributed less to China’s growth than private ones, they still receive preferential support from the state, which has a distorting effect. In our public session, Tomoo Marukawa noted the beginning of an increase of SOE assets as a percentage of China’s GDP which began in 2009, reversing a previous declining trend. Another participant noted a distinction between “reform” of the domestic economy and “opening up” externally. The direction of the former is positive but the treatment of foreign firms is not.

The Political System

The range of disagreement appears to be greater regarding the political system. The disagreement is not really between Japanese and American China experts. It is more among scholars in each country regarding which aspect of Chinese politics – for example elite politics, center vs. local, or bureaucratic interests – is most significant for understanding political outcomes and the system as a whole. Of course, between Japanese and American scholars there may be, and probably is, a difference between how much weight to give each factor. It appears that on balance Japanese scholars give more weight to elite politics than their American counterparts.

In this regard, Professor Akio Takahara of the University of Tokyo observed that there were two principal schools of thought concerning politics at the Center, each focusing on a different aspect of the system. On the one hand, the “institution school” sees high-level politics through institutions. On the other, the “power struggle school” emphasizes power struggle. As he said, “reality could be somewhere in between.” Political actors can contend for power through and around institutions, and institutions can better carry out their mission if they increase their relative power. Moreover, individual power-holders may use their control of institutional positions to increase their personal wealth and power (corruption), and so degrading the autonomy, coherence, and effectiveness of institutions.

By extension, there are other aspects of the system which, in tandem with institutions and power struggle, enrich our understanding.

The first is the mode of policy implementation. One is bureaucratic routine, according to regulations, norms, guidelines, and supervision. The other is through political campaigns, which seek to carry out goals through mobilization, intervention in the normal work of institutions, and some degree of intimidation. Campaigns occurred frequently during Mao Zedong’s rule, but they did not disappear after his death (the one-child-per-family campaign that began in the 1980s and the anti-corruption campaign today are examples), but the shift to a more reformist approach to the substance and implementation of policy is clear.

The second aspect is relations among different administrative levels (the center, provinces, cities, counties and township). These have been stable over recent decades, and sub-central local officials have had significant authority, autonomy vis-a-vis higher levels, opportunities for personal enrichment, clear policy goals (mainly stimulating economic growth and assuring social stability), and clear metrics of performance. The reforms formulated by Xi Jinping clearly change policy objectives but as yet lack criteria for measuring performance. Thus, the sustained implementation of the reforms is not assured, with potential consequences for the authority and autonomy of officials at each level. In addition, the anti-corruption campaign is highly disruptive, because it is a campaign and threatens to reduce opportunities for rent-seeking.

The third aspect is relations between state and society, which for most sectors and over time were liberalized considerably after the beginning of reform in 1979. The trends in the Xi Jinping period appear to be mixed. On the one hand, if effectively implemented, economic reforms will remedy the worst negative consequences of the political economy of the reform period, and a strengthening of the legal system will similarly provide channels for correcting abuse of power. On the other hand, restrictions on political activity, always tight, have been tightened further. In addition, the definition of what is political has been expanded.

There is general agreement that Xi Jinping has consolidated his power more quickly than his predecessors, and has more personal decision-making power than they did, as highlighted by Tomoki Kamo of Keio University. There are differences on whether this is because he and his leadership colleagues are insecure and need to suppress public alienation and dissent, or because such consolidation is a prerequisite for a vigorous reform effort (or both). Concentration of power, and initiatives like the anti-corruption campaign, have the side-effect of reducing feedback to the center.

Authors

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http://www.brookings.edu/events/2014/12/19-china-reemergence-comparing-us-japan-perspectives?rssid=bushr{6E88ACDE-F625-44A1-8F8D-D70B11CB2C44}http://webfeeds.brookings.edu/~/81287696/0/brookingsrss/experts/bushr~China%e2%80%99s-Reemergence-as-a-Great-Power-Comparing-American-and-Japanese-PerspectivesChina’s Reemergence as a Great Power: Comparing American and Japanese Perspectives

Event Information

The broad Japan-U.S. alliance is one of the most important partnerships for each country. Among a variety of tasks, the fundamental strategic purpose of the alliance in the coming decades will be to manage the revival of China as a great power. It is in both Washington’s and Tokyo’s interest that China’s revival occurs in ways that contribute to the stability of the international system rather than disrupt it. Understanding the character and trajectory of a reviving China is key to positive engagement and China’s international participation. Yet even this is no small task, and is made more complicated by a pluralism of views within both the United States and Japan on how to view China and how to approach it.

On December 19, the Center for East Asia Policy Studies hosted a seminar examining American and Japanese interpretations of China. In two sessions, leading China specialists from the United States and Japan presented views of China’s economic policy and trajectory, and its political system, priorities, and resources for dealing with policy challenges. Panel moderators and participants sought to analyze the policy implications of gaps in interpretation.

Event Information

The broad Japan-U.S. alliance is one of the most important partnerships for each country. Among a variety of tasks, the fundamental strategic purpose of the alliance in the coming decades will be to manage the revival of China as a great power. It is in both Washington’s and Tokyo’s interest that China’s revival occurs in ways that contribute to the stability of the international system rather than disrupt it. Understanding the character and trajectory of a reviving China is key to positive engagement and China’s international participation. Yet even this is no small task, and is made more complicated by a pluralism of views within both the United States and Japan on how to view China and how to approach it.

On December 19, the Center for East Asia Policy Studies hosted a seminar examining American and Japanese interpretations of China. In two sessions, leading China specialists from the United States and Japan presented views of China’s economic policy and trajectory, and its political system, priorities, and resources for dealing with policy challenges. Panel moderators and participants sought to analyze the policy implications of gaps in interpretation.

Transcript

Event Materials

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http://www.brookings.edu/events/2014/12/16-shared-challenges-cooperation-korea-china-us?rssid=bushr{97F24541-A297-4728-8CD7-CCC0E2C49EEC}http://webfeeds.brookings.edu/~/81012538/0/brookingsrss/experts/bushr~Shared-Challenges-and-Cooperation-for-Korea-China-and-the-USShared Challenges and Cooperation for Korea, China and the U.S.

Event Information

Though Northeast Asia is prosperous and stable relative to hotspots around the world, it faces its share of policy challenges, including potential over-the-horizon threats such as local instability, territorial contests and economic competition. Regional powers including the United States, China and the Republic of Korea – with tremendous political and economic clout – share many of these problems and have roles to play in addressing them.

On December 16, the Center for East Asia Policy Studies at Brookings, the Korea Foundation for Advanced Studies, and Peking University’s School of International Studies hosted a conference continuing deliberations undertaken in Seoul in April 2014. In three sessions, experts from Korea, China, and the United States identified emerging challenges to the international order, analyzed the web of relationships between the Korean Peninsula and major powers and charted paths for the region’s economic future. The conference placed particular emphasis on the opportunities for enhanced cooperation on regional peace, prosperity and security among all three states. The Honorable Daniel Russel, U.S. assistant secretary of State for East Asian and Pacific affairs, made an opening keynote address.

Event Information

Though Northeast Asia is prosperous and stable relative to hotspots around the world, it faces its share of policy challenges, including potential over-the-horizon threats such as local instability, territorial contests and economic competition. Regional powers including the United States, China and the Republic of Korea – with tremendous political and economic clout – share many of these problems and have roles to play in addressing them.

On December 16, the Center for East Asia Policy Studies at Brookings, the Korea Foundation for Advanced Studies, and Peking University’s School of International Studies hosted a conference continuing deliberations undertaken in Seoul in April 2014. In three sessions, experts from Korea, China, and the United States identified emerging challenges to the international order, analyzed the web of relationships between the Korean Peninsula and major powers and charted paths for the region’s economic future. The conference placed particular emphasis on the opportunities for enhanced cooperation on regional peace, prosperity and security among all three states. The Honorable Daniel Russel, U.S. assistant secretary of State for East Asian and Pacific affairs, made an opening keynote address.

Event Materials

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http://www.brookings.edu/research/testimony/2014/12/03-hong-kong-umbrella-movement-bush?rssid=bushr{080B4811-41C4-4CBF-A8BB-E94B44951B42}http://webfeeds.brookings.edu/~/80129005/0/brookingsrss/experts/bushr~Hong-Kong-Examining-the-Impact-of-the-Umbrella-MovementHong Kong: Examining the Impact of the "Umbrella Movement"

Editor's Note: On December 3, Richard Bush delivered testimony before the Subcommittee on East Asian and Pacific Affairs of the Senate Committee on Foreign Relations. Read his testimony below and watch the hearing online.

There has been a wide range of views in Hong Kong about the value of democratic elections.

So far, the Chinese government has consistently chosen to engineer the Hong Kong electoral system so that no individual it mistrusts could be elected chief executive (CE) and no political coalition that it fears could win control of the Legislative Council (or LegCo). To elect the chief executive, it created an election committee composed mainly of people it trusts. For LegCo, it established functional constituencies that give special representation to establishment economic and social groups. These functional constituencies together pick half the members of LegCo. As a result, Hong Kong’s economic elite has dominated those institutions.

Major economic interests in Hong Kong have been happy with the current set-up because it provides them with privileged access to decision-making and the ability to block initiatives proposed by the democratic camp. Within this establishment, there is long-standing belief that majority rule would create irresistible demands for a welfare state, which would raise taxes on corporations and wealthy individuals and sap Hong Kong’s competitiveness.

The public, on the other hand, supports democratization. In the most representative election races (for some LegCo seats), candidates of the pro-democracy parties together get 55 to 60 percent of the vote. Those parties have tried for over twenty years to make the electoral system more representative and to eliminate the ability of Beijing and the establishment to control political outcomes. But there are divisions within the pan-democratic camp between moderate and radical factions, based on the degree of mistrust of Beijing’s intentions.

There is a working class party and a labor confederation that supports Beijing and is supported by it. On electoral reform, it has followed China’s lead.

Of course, any electoral system requires the protection of political rights. The Joint Declaration and the Hong Kong Basic Law protected those rights on paper, and the judiciary generally has upheld them. But there are serious concerns in Hong Kong that political rights are now being whittled away.

The August 31st decision of the PRC National People’s Congress-Standing Committee on the 2017 Chief Executive election confirmed the fears of Hong Kong’s pan-democratic camp that Beijing does not intend to create a genuinely democratic electoral system. That decision almost guaranteed there would be with some kind of public protest.

Before August 31st, there had been some hope in Hong Kong that China’s leaders would set flexible parameters for the 2017 election of the chief executive, flexible enough to allow an election in which candidates that represented the range of local opinions could compete on a level playing field. Instead, the rules the Standing Committee of the National People’s Congress laid down were interpreted as ensuring that Beijing and the local Hong Kong establishment, by controlling the nominating committee, could screen out candidates that they saw as a threat to their interests.

I happen to believe that before August 31st there was available a compromise on the nomination process. The approach I have in mind would have liberalized the composition of the nominating committee so that it was more representative of Hong Kong society and set a reasonable threshold for placing someone in nomination. This would have been consistent with the Basic Law (a Chinese requirement) and likely ensured that a pan-Democratic politician could have been nominated (the democrats’ minimum hope). Hong Kong voters would have had a genuine choice. There were Hong Kong proposals along these lines. Such an approach would have had a chance of gaining the support of moderate Democrats in Legislative Council, enough for reaching the two-thirds majority required for passage of the election plan.

Reaching such a compromise was difficult because of the deep-seated mistrust between the Hong Kong democratic camp and Beijing, and within the democratic camp. If there was to be movement towards a deal Beijing would have had to signal that it was serious about such a compromise, in order to engage moderate democrats. It chose not to, and an opportunity was lost.

Why Beijing spurned a compromise is unclear.

Perhaps it interpreted its “universal suffrage” pledge narrowly, to mean one-person-one-vote, and not a competitive election. Perhaps it wished to defer a truly competitive contest until it was sure that one-person-one-vote elections would not hurt its interests. Perhaps Beijing was overly frightened about the proposed civil disobedience campaign called “Occupy Central.” Perhaps it judged that radical democrats would block their moderate comrades from agreeing to a compromise. Perhaps China actually believed its own propaganda that “foreign forces” were behind the protests. Perhaps it never had any intention of allowing truly representative government and majority rule. But if Beijing believed that taking a hard line would ensure stability, it was badly mistaken.

Whatever the case, the majority in Hong Kong saw the August 31st decision as a bait-and-switch way for Beijing to continue to control the outcome of the CE election and as a denial of the long-standing desire for genuine democracy. A coalition of student leaders, Occupy Central supporters, democratic politicians, radical activists, and middle class people resorted to the only political outlet they had: public protest. If the Chinese government had wished to empower Hong Kong radicals, it couldn’t have hit upon a better way.

Although Beijing’s August 31st decision guaranteed a public response in Hong Kong, the form it took was unexpected. Student groups preempted the original Occupy Central plan, and the takeover of three separate downtown areas resulted, not from a plan but from the flow of events. The Hong Kong Police did overreact in some instances, but each time it sought to reestablish control, there was a surge of public support for the core protester groups, mobilized by social and other media.

The protests were fueled by more than a desire for democracy.

Also at work were factors common in other advanced societies. Hong Kong’s level of income and wealth inequality is one of the highest in the world. Young people tend to believe that they will not be able to achieve a standard of living similar to that of their parents. Real wages have been flat for more than a decade. Buying a home is out of reach for young people, in part because a small group of real estate companies control the housing supply. Smart and ambitious individuals from China compete for good jobs.

Hong Kong students have gotten the most attention in the current protests. Just as important however, are older cohorts who are pessimistic about their life chances. They believe that the Hong Kong elite, which controls both economic and political power, is to blame for these problems. They regard genuine democracy as the only remedy.

The Hong Kong government’s response has been mixed but restrained on the whole.

The Hong Kong police did commit excesses in their attempt to control the crowds. Teargas was used once early on, and pepper spray on a number of occasions since then. There was one particular incident where police officers beat a protester excessively (for which seven of the officers involved were arrested last week).

It is worth noting that the scenario for which the police prepared was not the one that occurred. What was expected was a civil disobedience action in a relatively restricted area with a moderate number of protesters who, following their leaders’ plan, would allow themselves to be arrested. What happened in late September was very different. There were three venues instead of one. Many more protesters took part, and they had no interest in quickly offering themselves for arrest. Instead, they sought to maintain control of public thoroughfares, a violation of law, until Beijing and the Hong Kong government made major concessions. Even when courts have ordered some streets cleared, those occupying have not always complied.

After the initial clashes, the Hong Kong government chose not to mount a major crackdown but instead to wait out the protesters. It accepted the occupation for a number of weeks, and now seeks to clear some streets pursuant to court order. Moreover, the government undertook to engage at least one of the students in a dialogue over how to end the crisis. In the only session of the dialogue to occur, on October 21st, senior officials floated ideas to assuage some of the protesters’ concerns and to improve upon the electoral parameters laid down by Beijing.

The dialogue has not progressed for two reasons. First of all, the Hong Kong government is not a free agent in resolving the crisis. Beijing is the ultimate decider here, and the Hong Kong government must stay within the guidelines it sets. Second, the student federation leaders who took part in the dialogue are not free agents either. They represent only one of the student groups, and other actors are involved. With its leadership fragmented, the movement has never figured out its minimum goals and therefore what it would accept in return for ending the protest. It underestimated Beijing’s resolve and instead has insisted on the impossible, that Beijing withdraw the August 31st decision. Now, even though the Hong Kong public and the leaders of the original Occupy Central effort believe that the protesters should retire to contend another day, the occupation continues.

For those who believe that the rule of law is a fundamental pillar of Hong Kong’s autonomy, the last two months have been worrisome. Once some members of a community decide for themselves which laws they will obey and which they won’t; once the authorities pick and choose which laws they will enforce and abide by, the rule of law begins to atrophy. The protesters’ commitment to democracy is commendable. The generally restrained and peaceable character of their protest has been widely praised. But something is lost when both the community and its government begin to abandon the idea that no-one is above the law.

Regional views and implications

Observers have believed that the implications of the Umbrella Movement are greatest for Taiwan, because Beijing has said that Taiwan will be reunified under the same formula that it used for Hong Kong (one-country, two systems). And there was momentary media attention in Taiwan when the Hong Kong protests began, but it quickly dissipated. The vast majority of Taiwan citizens have long since rejected one-country, two systems. China’s Hong Kong policies only reconfirm what Taiwan people already knew.

Hong Kong events also send a signal to all of East Asia’s democracies, not just Taiwan. Anyone who studies Hong Kong’s politics and society comes to the conclusion that it has been as ready for democracy as any place in East Asia, and that its instability in recent years is due more to the absence of democracy than because it is unready.

The long-standing premise of U.S. policy is that Hong Kong people are ready for democracy. Since the protest movement began, the U.S. government has reiterated its support for the rule of law, Hong Kong’s autonomy, respect for the political freedoms of Hong Kong people, and a universal-suffrage election that would provide the people of Hong Kong “a genuine choice of candidates that are representative of the peoples and the voters’ will.” Washington has also called for restraint on all sides.

Finally, the strategic question for East Asia is what the rise of China means for its neighbors. That question will be answered in part by China’s power relative to the United States and others. But it will also be answered by what happens between China and its neighbors in a series of specific encounters. Through those interactions, China will define what kind of great power it will become. North Korea, the East and South China Seas, and Taiwan are the most obvious of these specific encounters. But Hong Kong is as well. If the struggle there for a more democratic system ends well, it will tell us something positive about China’s future trajectory. If it ends badly, it will say something very different.

Looking forward, several options exist for resolving the crisis and only one of them is good.

One option is a harsh crackdown by China. Article 18 of the Basic Law gives Beijing the authority to declare a state of emergency in Hong Kong if “turmoil” there “endangers national unity or security and is beyond the control” of the Hong Kong government. In that case, Chinese national laws would be applied to Hong Kong and could be enforced in the same way they are in China. We would then see crowd control, Chinese style. I believe this scenario is unlikely as long as Beijing has some confidence that the protest movement will become increasingly isolated and ultimately collapse.

A second option is that the occupation ends but the unrepresentative electoral system that has been used up until now continues. That would happen because two-thirds of the Legislative Council is required to enact the one-person-one-vote proposal of the Chinese and Hong Kong governments for electing the chief executive. Getting two-thirds requires the votes of a few democratic members. If all moderate democrats oppose the package for whatever reason, then the next CE will be elected by the 1,200-person election committee, not by Hong Kong voters. Protests are liable to resume. There is a danger that in response, Beijing will move quietly to restrict press freedom, the rule of law, and the scope for civil society beyond what it has already done.

The third scenario is for a late compromise within the parameters of Beijing’s August 31st decision. The goal here would be to create a process within the nominating committee that would make it possible for a leader of the democratic camp to be nominated for the chief executive election, creating a truly competitive election. That requires two things. First, the nominating committee must be more representative of Hong Kong society. Second, the nominating committee, before it picks the two or three election nominees, should be able to review a greater number of potential nominees. Done properly, that could yield the nomination of a democratic politician whom Beijing does not mistrust but whose platform would reflect the aspirations of democratic voters. Prominent individuals in Hong Kong have discussed this approach in print, and Hong Kong senior officials have hinted a willingness to consider it. For such a scenario to occur, Beijing would have to be willing to show more flexibility than demonstrated so far; the Hong Kong government should be forthcoming about what it has in mind; and some leaders of the democratic camp must be willing to engage both Beijing and the Hong Kong government. In the climate of mutual mistrust that has deepened since August 31st, that is a tall order. But at this point it appears to be the best way out of a bad situation.

Authors

Publication: Subcommittee on East Asian and Pacific Affairs, Senate Committee on Foreign Relations

Image Source: Tyrone Siu / Reuters

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Wed, 03 Dec 2014 00:00:00 -0500Richard C. Bush III

Editor's Note: On December 3, Richard Bush delivered testimony before the Subcommittee on East Asian and Pacific Affairs of the Senate Committee on Foreign Relations. Read his testimony below and watch the hearing online.

There has been a wide range of views in Hong Kong about the value of democratic elections.

So far, the Chinese government has consistently chosen to engineer the Hong Kong electoral system so that no individual it mistrusts could be elected chief executive (CE) and no political coalition that it fears could win control of the Legislative Council (or LegCo). To elect the chief executive, it created an election committee composed mainly of people it trusts. For LegCo, it established functional constituencies that give special representation to establishment economic and social groups. These functional constituencies together pick half the members of LegCo. As a result, Hong Kong’s economic elite has dominated those institutions.

Major economic interests in Hong Kong have been happy with the current set-up because it provides them with privileged access to decision-making and the ability to block initiatives proposed by the democratic camp. Within this establishment, there is long-standing belief that majority rule would create irresistible demands for a welfare state, which would raise taxes on corporations and wealthy individuals and sap Hong Kong’s competitiveness.

The public, on the other hand, supports democratization. In the most representative election races (for some LegCo seats), candidates of the pro-democracy parties together get 55 to 60 percent of the vote. Those parties have tried for over twenty years to make the electoral system more representative and to eliminate the ability of Beijing and the establishment to control political outcomes. But there are divisions within the pan-democratic camp between moderate and radical factions, based on the degree of mistrust of Beijing’s intentions.

There is a working class party and a labor confederation that supports Beijing and is supported by it. On electoral reform, it has followed China’s lead.

Of course, any electoral system requires the protection of political rights. The Joint Declaration and the Hong Kong Basic Law protected those rights on paper, and the judiciary generally has upheld them. But there are serious concerns in Hong Kong that political rights are now being whittled away.

The August 31st decision of the PRC National People’s Congress-Standing Committee on the 2017 Chief Executive election confirmed the fears of Hong Kong’s pan-democratic camp that Beijing does not intend to create a genuinely democratic electoral system. That decision almost guaranteed there would be with some kind of public protest.

Before August 31st, there had been some hope in Hong Kong that China’s leaders would set flexible parameters for the 2017 election of the chief executive, flexible enough to allow an election in which candidates that represented the range of local opinions could compete on a level playing field. Instead, the rules the Standing Committee of the National People’s Congress laid down were interpreted as ensuring that Beijing and the local Hong Kong establishment, by controlling the nominating committee, could screen out candidates that they saw as a threat to their interests.

I happen to believe that before August 31st there was available a compromise on the nomination process. The approach I have in mind would have liberalized the composition of the nominating committee so that it was more representative of Hong Kong society and set a reasonable threshold for placing someone in nomination. This would have been consistent with the Basic Law (a Chinese requirement) and likely ensured that a pan-Democratic politician could have been nominated (the democrats’ minimum hope). Hong Kong voters would have had a genuine choice. There were Hong Kong proposals along these lines. Such an approach would have had a chance of gaining the support of moderate Democrats in Legislative Council, enough for reaching the two-thirds majority required for passage of the election plan.

Reaching such a compromise was difficult because of the deep-seated mistrust between the Hong Kong democratic camp and Beijing, and within the democratic camp. If there was to be movement towards a deal Beijing would have had to signal that it was serious about such a compromise, in order to engage moderate democrats. It chose not to, and an opportunity was lost.

Why Beijing spurned a compromise is unclear.

Perhaps it interpreted its “universal suffrage” pledge narrowly, to mean one-person-one-vote, and not a competitive election. Perhaps it wished to defer a truly competitive contest until it was sure that one-person-one-vote elections would not hurt its interests. Perhaps Beijing was overly frightened about the proposed civil disobedience campaign called “Occupy Central.” Perhaps it judged that radical democrats would block their moderate comrades from agreeing to a compromise. Perhaps China actually believed its own propaganda that “foreign forces” were behind the protests. Perhaps it never had any intention of allowing truly representative government and majority rule. But if Beijing believed that taking a hard line would ensure stability, it was badly mistaken.

Whatever the case, the majority in Hong Kong saw the August 31st decision as a bait-and-switch way for Beijing to continue to control the outcome of the CE election and as a denial of the long-standing desire for genuine democracy. A coalition of student leaders, Occupy Central supporters, democratic politicians, radical activists, and middle class people resorted to the only political outlet they had: public protest. If the Chinese government had wished to empower Hong Kong radicals, it couldn’t have hit upon a better way.

Although Beijing’s August 31st decision guaranteed a public response in Hong Kong, the form it took was unexpected. Student groups preempted the original Occupy Central plan, and the takeover of three separate downtown areas resulted, not from a plan but from the flow of events. The Hong Kong Police did overreact in some instances, but each time it sought to reestablish control, there was a surge of public support for the core protester groups, mobilized by social and other media.

The protests were fueled by more than a desire for democracy.

Also at work were factors common in other advanced societies. Hong Kong’s level of income and wealth inequality is one of the highest in the world. Young people tend to believe that they will not be able to achieve a standard of living similar to that of their parents. Real wages have been flat for more than a decade. Buying a home is out of reach for young people, in part because a small group of real estate companies control the housing supply. Smart and ambitious individuals from China compete for good jobs.

Hong Kong students have gotten the most attention in the current protests. Just as important however, are older cohorts who are pessimistic about their life chances. They believe that the Hong Kong elite, which controls both economic and political power, is to blame for these problems. They regard genuine democracy as the only remedy.

The Hong Kong government’s response has been mixed but restrained on the whole.

The Hong Kong police did commit excesses in their attempt to control the crowds. Teargas was used once early on, and pepper spray on a number of occasions since then. There was one particular incident where police officers beat a protester excessively (for which seven of the officers involved were arrested last week).

It is worth noting that the scenario for which the police prepared was not the one that occurred. What was expected was a civil disobedience action in a relatively restricted area with a moderate number of protesters who, following their leaders’ plan, would allow themselves to be arrested. What happened in late September was very different. There were three venues instead of one. Many more protesters took part, and they had no interest in quickly offering themselves for arrest. Instead, they sought to maintain control of public thoroughfares, a violation of law, until Beijing and the Hong Kong government made major concessions. Even when courts have ordered some streets cleared, those occupying have not always complied.

After the initial clashes, the Hong Kong government chose not to mount a major crackdown but instead to wait out the protesters. It accepted the occupation for a number of weeks, and now seeks to clear some streets pursuant to court order. Moreover, the government undertook to engage at least one of the students in a dialogue over how to end the crisis. In the only session of the dialogue to occur, on October 21st, senior officials floated ideas to assuage some of the protesters’ concerns and to improve upon the electoral parameters laid down by Beijing.

The dialogue has not progressed for two reasons. First of all, the Hong Kong government is not a free agent in resolving the crisis. Beijing is the ultimate decider here, and the Hong Kong government must stay within the guidelines it sets. Second, the student federation leaders who took part in the dialogue are not free agents either. They represent only one of the student groups, and other actors are involved. With its leadership fragmented, the movement has never figured out its minimum goals and therefore what it would accept in return for ending the protest. It underestimated Beijing’s resolve and instead has insisted on the impossible, that Beijing withdraw the August 31st decision. Now, even though the Hong Kong public and the leaders of the original Occupy Central effort believe that the protesters should retire to contend another day, the occupation continues.

For those who believe that the rule of law is a fundamental pillar of Hong Kong’s autonomy, the last two months have been worrisome. Once some members of a community decide for themselves which laws they will obey and which they won’t; once the authorities pick and choose which laws they will enforce and abide by, the rule of law begins to atrophy. The protesters’ commitment to democracy is commendable. The generally restrained and peaceable character of their protest has been widely praised. But something is lost when both the community and its government begin to abandon the idea that no-one is above the law.

Regional views and implications

Observers have believed that the implications of the Umbrella Movement are greatest for Taiwan, because Beijing has said that Taiwan will be reunified under the same formula that it used for Hong Kong (one-country, two systems). And there was momentary media attention in Taiwan when the Hong Kong protests began, but it quickly dissipated. The vast majority of Taiwan citizens have long since rejected one-country, two systems. China’s Hong Kong policies only reconfirm what Taiwan people already knew.

Hong Kong events also send a signal to all of East Asia’s democracies, not just Taiwan. Anyone who studies Hong Kong’s politics and society comes to the conclusion that it has been as ready for democracy as any place in East Asia, and that its instability in recent years is due more to the absence of democracy than because it is unready.

The long-standing premise of U.S. policy is that Hong Kong people are ready for democracy. Since the protest movement began, the U.S. government has reiterated its support for the rule of law, Hong Kong’s autonomy, respect for the political freedoms of Hong Kong people, and a universal-suffrage election that would provide the people of Hong Kong “a genuine choice of candidates that are representative of the peoples and the voters’ will.” Washington has also called for restraint on all sides.

Finally, the strategic question for East Asia is what the rise of China means for its neighbors. That question will be answered in part by China’s power relative to the United States and others. But it will also be answered by what happens between China and its neighbors in a series of specific encounters. Through those interactions, China will define what kind of great power it will become. North Korea, the East and South China Seas, and Taiwan are the most obvious of these specific encounters. But Hong Kong is as well. If the struggle there for a more democratic system ends well, it will tell us something positive about China’s future trajectory. If it ends badly, it will say something very different.

Looking forward, several options exist for resolving the crisis and only one of them is good.

One option is a harsh crackdown by China. Article 18 of the Basic Law gives Beijing the authority to declare a state of emergency in Hong Kong if “turmoil” there “endangers national unity or security and is beyond the control” of the Hong Kong government. In that case, Chinese national laws would be applied to Hong Kong and could be enforced in the same way they are in China. We would then see crowd control, Chinese style. I believe this scenario is unlikely as long as Beijing has some confidence that the protest movement will become increasingly isolated and ultimately collapse.

A second option is that the occupation ends but the unrepresentative electoral system that has been used up until now continues. That would happen because two-thirds of the Legislative Council is required to enact the one-person-one-vote proposal of the Chinese and Hong Kong governments for electing the chief executive. Getting two-thirds requires the votes of a few democratic members. If all moderate democrats oppose the package for whatever reason, then the next CE will be elected by the 1,200-person election committee, not by Hong Kong voters. Protests are liable to resume. There is a danger that in response, Beijing will move quietly to restrict press freedom, the rule of law, and the scope for civil society beyond what it has already done.

The third scenario is for a late compromise within the parameters of Beijing’s August 31st decision. The goal here would be to create a process within the nominating committee that would make it possible for a leader of the democratic camp to be nominated for the chief executive election, creating a truly competitive election. That requires two things. First, the nominating committee must be more representative of Hong Kong society. Second, the nominating committee, before it picks the two or three election nominees, should be able to review a greater number of potential nominees. Done properly, that could yield the nomination of a democratic politician whom Beijing does not mistrust but whose platform would reflect the aspirations of democratic voters. Prominent individuals in Hong Kong have discussed this approach in print, and Hong Kong senior officials have hinted a willingness to consider it. For such a scenario to occur, Beijing would have to be willing to show more flexibility than demonstrated so far; the Hong Kong government should be forthcoming about what it has in mind; and some leaders of the democratic camp must be willing to engage both Beijing and the Hong Kong government. In the climate of mutual mistrust that has deepened since August 31st, that is a tall order. But at this point it appears to be the best way out of a bad situation.

My topic is Taiwan and Asia. The theme that I will try to develop is that Taiwan is on the margins of its geographic region. My main focus is on Taiwan’s regional economic integration but I will not ignore security issues. My conclusion is that Taiwan’s relative marginalization is due not to anything idiosyncratic about Taiwan but it stems from how China has pursued its long-standing political goal of unification.

Let me begin with a historical aside, and the observation that in certain ways Taiwan has always been marginal to its region. Before 1895, it was a backwater for both China and East Asia. For fifty years after 1895, it was a Japanese colony, relatively integrated with Japan but tied only loosely to the rest of the region. At the end of World War II, the expectation was that it would be returned to China as a province of the Republic of China and would contribute to the project of postwar national reconstruction. The civil war and the emergence of two regimes – the Republic of China on Taiwan and the People’s Republic of China on the Mainland – meant that the expected integration did not occur. Instead, Taiwan became linked economically to Japan and economically and militarily tied to the United States. It remained so until the 1970s when, with the normalization of U.S.-China relations, there was some expectation – or fear – that unification would happen, and this time on terms set by Beijing.

Formal unification didn’t happen, but something else did: out of mutual self-interest, the two sides of the Strait developed economic relations. With that development came, in the minds of some at least, the hope that economic relations to lead to political reconciliation. Taiwan’s ties with the Mainland would, it was thought, be stronger than its ties with the rest of the East Asia, with political implications. Economically, the last twenty-five years have been a time of growing business interdependence between the two sides, as some Taiwan firms became intermediate links in global supply chains, others marketed final products to the domestic Chinese economy, and some did both. In contrast, the policies of the Lee Teng-hui administration after 1993 and those of the Chen Shui-bian administration after 2002 may be regarded as political resistance to the centripetal force of the Chinese economy. The policies of the Ma Administration reflect an accommodation to economic forces but with no concessions to pressures from Beijing on political issues.

The rapid expansion of the Chinese economy over the last fifteen years has transformed Taiwan’s situation once again. It is not just Taiwan companies that have sought close economic ties with China. The same has been true of firms in Japan, Korea, and Hong Kong. Moreover, the resource-rich countries of Southeast Asia have supplied China with raw materials. As a result, China has become the center of a truly regional economy – the hub to the spokes of its neighbors. The United States is still important, particularly as the default, final market, but China has become the main regional game.

As business activities became more integrated, pressures intensified for trade facilitation on a regional basis. So there has emerged a noodle bowl of FTAs and other preferential arrangements.

But Taiwan was excluded from trade-facilitation integration in the region, even though it was becoming more integrated in terms of business. Hence, the creation of the ROK-PRC FTA fosters fears that Taiwan firms will not be able to compete with their Korean competitors in the Chinese market. The proposed Regional Economic Cooperation Partnership could reduce the competitiveness of Taiwan firms in markets throughout the region. The exception that proves this rule of marginalization is the cross-Strait Economic Cooperation Framework Agreement. It makes economic sense for Taiwan, since China is its primary export market. But the exclusion from regional economic arrangements continues. It is true that after the signing of ECFA in June 2010, Taiwan was able to conclude FTAs with Singapore and New Zealand. But these are relatively small economies and they did not move forward with Taipei until they had a political green light from Beijing. Regarding any other trade liberalization schemes like RCEP, Beijing has told Taipei that it needs to finish ECFA first.

These circumstances create another dilemma for Taiwan. That is, a fear is that growing economic interdependence with China and continuing economic marginalization of Taiwan from its own region will lead it to slip inexorably into China’s political control.

There have been two basic answers in Taiwan to this dilemma, one from the Ma administration and the other from the Democratic Progressive Party and activist groups like the Sunflower Movement. Each side agrees that part of the answer is trade liberalization, not just with China but also with Taiwan’s other major trading partners. Each side asserts that it wishes to improve the Taiwan economy and promote prosperity. But each offers different means, particularly with respect to economic interaction with the Mainland. On the one hand, the KMT has been forward-leaning by normalizing, liberalizing, and institutionalizing cross-Strait economic relations. On the other hand, the DPP has been reserved about increasing interdependence with China. It mounted procedural and substantive opposition to the Service Trade Agreement. For its part, the Sunflower Movement took over the Legislative Yuan in March, bringing consideration of the agreement to a halt.

I happen to believe that the Ma Administration has the better approach. It understands that trade liberalization is necessary not just to provide better and equal market access, but also to stimulate structural reform and change the status quo of Taiwan’s economy. The Ma Administration is correct to aim high by seeking membership in the TPP. (I have written on what needs to happen for Taiwan to join.) Finally, the Ma Administration has judged that Taiwan will have a chance to do liberalization with Taiwan’s other trading partners only if it does liberalization with China first, because Beijing will use its political clout to get those other trading partners to refuse to liberalize with Taiwan. The DPP asserts that such sequencing is unnecessary.

Make no mistake: economic liberalization is hard. It disrupts the status quo. Corporations, small and medium-sized enterprises, white and blue-collar workers, and farmers must make significant adjustments. The anxiety that people in Taiwan concerning the opening of the domestic market further and deeper integration with China is real. The Sunflower Movement is only a symptom of a larger phenomenon, one that any Taiwan administration will have to address. The Ma Administration has proposed internal reforms that are needed to improve Taiwan’s competitiveness, which is one way to address the economic side of the anxiety. There is also a need to address the concern that economic interdependence is a slippery slope to political subordination. There is a slope, but it doesn’t have to be slippery as long as Taiwan has a good sense of its interests regarding political and security matters. I happen to believe that President Ma has been very cautious in this area, but any successor will have to be so as well.

Those in Taiwan who wish to slow down economic interdependence with China face their own challenges. First, they must consider the possibility that economic interdependence with China will continue whatever the bias of government policy, because Taiwan businesses can be quite skillful in getting around Taipei’s restrictions to the China market (as happened in the Chen Shui-bian Administration). Second, because they want to pursue a better balance in Taiwan’s relations with China and other markets, they must contend with China’s diplomatic ability to impose obstacles to Taiwan’s liberalization with other countries. Finally, and most profoundly, they must recognize the consequences for Taiwan’s economy of not being able to liberalize with others: that is, the further marginalization and isolation of Taiwan from the regional and global economy. This is a slippery slope of another kind.

Let me touch briefly on Taiwan’s relationship with the East Asian region on security matters.

First of all, when it comes to deterring China’s military threats or defending Taiwan against PLA attacks if deterrence fails, the United States is the only game in town. No Asian power is interested in making a significant contribution to Taiwan’s security. Because the U.S. is so important, Taipei needs both a good political relationship with Washington and consensus with it on defense strategy.

On participation in regional security arrangements, Taiwan is very much on the margins, which is where the PRC wants it. That is unfortunate, because there are ways that Taiwan could contribute. In a few cases, Taipei has participated unilaterally. It voluntarily chose to adhere to certain regional and global security regimes. It has taken its own diplomatic overtures, particularly the East China Sea Peace Initiative and the follow-on fisheries agreement with Japan. The latter is particularly significant because it addresses a proximate danger to regional peace and stability.

In terms of the Washington’s rebalance-to-Asia policy, therefore, Taiwan both contributes in its own way and benefits from America’s active political, economic, and military presence in the region.

So why has China sought to exclude Taiwan from developments in the East Asian region?

I think I understand the historical reasons for doing so. Since 1949, the PRC and the ROC have engaged in a struggle over participation in the international arena. Beijing has always seen this as a zero-sum struggle, and has sought to block arrangements that it regarded as two Chinas, one China and one Taiwan, and Taiwan independence. As China achieved a dominant position, Taiwan has moved away from zero-sum struggle and instead has tried to facilitate the ROC’s participation in parallel with the PRC, but without much success.

To my mind, China’s approach to Taiwan’s participation in the life of the East Asian region has become short-sighted. Driving the ROC from the international system was always a means to a higher end: to induce unification. Since 1979, it has seen fit to convince Taiwan to agree voluntarily to end the fundamental dispute between the two sides. But for Beijing to secure Taiwan’s voluntary consent to unification, it needs the agreement not just of Taiwan’s leaders but of the public at large. Indeed, it needs a very broad consensus that unification is in the island’s long-term interests. But the Taiwan public has long sought dignity in the international community, so efforts by China to deny that dignity through a policy of marginalization only fosters anti-unification sentiment.

For China to exclude Taiwan from the East Asian and global economy is, in my mind, particularly short-sighted. If I am correct that the only way Taiwan can achieve long-term prosperity is to carry out, multi-directional economic liberalization, then China’s efforts to block that liberalization will leave Taiwan people worse off economically. That is an outcome that will undermine China’s unification goals much more than the denial of dignity. In that case, the policy of marginalization becomes self-defeating.

My topic is Taiwan and Asia. The theme that I will try to develop is that Taiwan is on the margins of its geographic region. My main focus is on Taiwan’s regional economic integration but I will not ignore security issues. My conclusion is that Taiwan’s relative marginalization is due not to anything idiosyncratic about Taiwan but it stems from how China has pursued its long-standing political goal of unification.

Let me begin with a historical aside, and the observation that in certain ways Taiwan has always been marginal to its region. Before 1895, it was a backwater for both China and East Asia. For fifty years after 1895, it was a Japanese colony, relatively integrated with Japan but tied only loosely to the rest of the region. At the end of World War II, the expectation was that it would be returned to China as a province of the Republic of China and would contribute to the project of postwar national reconstruction. The civil war and the emergence of two regimes – the Republic of China on Taiwan and the People’s Republic of China on the Mainland – meant that the expected integration did not occur. Instead, Taiwan became linked economically to Japan and economically and militarily tied to the United States. It remained so until the 1970s when, with the normalization of U.S.-China relations, there was some expectation – or fear – that unification would happen, and this time on terms set by Beijing.

Formal unification didn’t happen, but something else did: out of mutual self-interest, the two sides of the Strait developed economic relations. With that development came, in the minds of some at least, the hope that economic relations to lead to political reconciliation. Taiwan’s ties with the Mainland would, it was thought, be stronger than its ties with the rest of the East Asia, with political implications. Economically, the last twenty-five years have been a time of growing business interdependence between the two sides, as some Taiwan firms became intermediate links in global supply chains, others marketed final products to the domestic Chinese economy, and some did both. In contrast, the policies of the Lee Teng-hui administration after 1993 and those of the Chen Shui-bian administration after 2002 may be regarded as political resistance to the centripetal force of the Chinese economy. The policies of the Ma Administration reflect an accommodation to economic forces but with no concessions to pressures from Beijing on political issues.

The rapid expansion of the Chinese economy over the last fifteen years has transformed Taiwan’s situation once again. It is not just Taiwan companies that have sought close economic ties with China. The same has been true of firms in Japan, Korea, and Hong Kong. Moreover, the resource-rich countries of Southeast Asia have supplied China with raw materials. As a result, China has become the center of a truly regional economy – the hub to the spokes of its neighbors. The United States is still important, particularly as the default, final market, but China has become the main regional game.

As business activities became more integrated, pressures intensified for trade facilitation on a regional basis. So there has emerged a noodle bowl of FTAs and other preferential arrangements.

But Taiwan was excluded from trade-facilitation integration in the region, even though it was becoming more integrated in terms of business. Hence, the creation of the ROK-PRC FTA fosters fears that Taiwan firms will not be able to compete with their Korean competitors in the Chinese market. The proposed Regional Economic Cooperation Partnership could reduce the competitiveness of Taiwan firms in markets throughout the region. The exception that proves this rule of marginalization is the cross-Strait Economic Cooperation Framework Agreement. It makes economic sense for Taiwan, since China is its primary export market. But the exclusion from regional economic arrangements continues. It is true that after the signing of ECFA in June 2010, Taiwan was able to conclude FTAs with Singapore and New Zealand. But these are relatively small economies and they did not move forward with Taipei until they had a political green light from Beijing. Regarding any other trade liberalization schemes like RCEP, Beijing has told Taipei that it needs to finish ECFA first.

These circumstances create another dilemma for Taiwan. That is, a fear is that growing economic interdependence with China and continuing economic marginalization of Taiwan from its own region will lead it to slip inexorably into China’s political control.

There have been two basic answers in Taiwan to this dilemma, one from the Ma administration and the other from the Democratic Progressive Party and activist groups like the Sunflower Movement. Each side agrees that part of the answer is trade liberalization, not just with China but also with Taiwan’s other major trading partners. Each side asserts that it wishes to improve the Taiwan economy and promote prosperity. But each offers different means, particularly with respect to economic interaction with the Mainland. On the one hand, the KMT has been forward-leaning by normalizing, liberalizing, and institutionalizing cross-Strait economic relations. On the other hand, the DPP has been reserved about increasing interdependence with China. It mounted procedural and substantive opposition to the Service Trade Agreement. For its part, the Sunflower Movement took over the Legislative Yuan in March, bringing consideration of the agreement to a halt.

I happen to believe that the Ma Administration has the better approach. It understands that trade liberalization is necessary not just to provide better and equal market access, but also to stimulate structural reform and change the status quo of Taiwan’s economy. The Ma Administration is correct to aim high by seeking membership in the TPP. (I have written on what needs to happen for Taiwan to join.) Finally, the Ma Administration has judged that Taiwan will have a chance to do liberalization with Taiwan’s other trading partners only if it does liberalization with China first, because Beijing will use its political clout to get those other trading partners to refuse to liberalize with Taiwan. The DPP asserts that such sequencing is unnecessary.

Make no mistake: economic liberalization is hard. It disrupts the status quo. Corporations, small and medium-sized enterprises, white and blue-collar workers, and farmers must make significant adjustments. The anxiety that people in Taiwan concerning the opening of the domestic market further and deeper integration with China is real. The Sunflower Movement is only a symptom of a larger phenomenon, one that any Taiwan administration will have to address. The Ma Administration has proposed internal reforms that are needed to improve Taiwan’s competitiveness, which is one way to address the economic side of the anxiety. There is also a need to address the concern that economic interdependence is a slippery slope to political subordination. There is a slope, but it doesn’t have to be slippery as long as Taiwan has a good sense of its interests regarding political and security matters. I happen to believe that President Ma has been very cautious in this area, but any successor will have to be so as well.

Those in Taiwan who wish to slow down economic interdependence with China face their own challenges. First, they must consider the possibility that economic interdependence with China will continue whatever the bias of government policy, because Taiwan businesses can be quite skillful in getting around Taipei’s restrictions to the China market (as happened in the Chen Shui-bian Administration). Second, because they want to pursue a better balance in Taiwan’s relations with China and other markets, they must contend with China’s diplomatic ability to impose obstacles to Taiwan’s liberalization with other countries. Finally, and most profoundly, they must recognize the consequences for Taiwan’s economy of not being able to liberalize with others: that is, the further marginalization and isolation of Taiwan from the regional and global economy. This is a slippery slope of another kind.

Let me touch briefly on Taiwan’s relationship with the East Asian region on security matters.

First of all, when it comes to deterring China’s military threats or defending Taiwan against PLA attacks if deterrence fails, the United States is the only game in town. No Asian power is interested in making a significant contribution to Taiwan’s security. Because the U.S. is so important, Taipei needs both a good political relationship with Washington and consensus with it on defense strategy.

On participation in regional security arrangements, Taiwan is very much on the margins, which is where the PRC wants it. That is unfortunate, because there are ways that Taiwan could contribute. In a few cases, Taipei has participated unilaterally. It voluntarily chose to adhere to certain regional and global security regimes. It has taken its own diplomatic overtures, particularly the East China Sea Peace Initiative and the follow-on fisheries agreement with Japan. The latter is particularly significant because it addresses a proximate danger to regional peace and stability.

In terms of the Washington’s rebalance-to-Asia policy, therefore, Taiwan both contributes in its own way and benefits from America’s active political, economic, and military presence in the region.

So why has China sought to exclude Taiwan from developments in the East Asian region?

I think I understand the historical reasons for doing so. Since 1949, the PRC and the ROC have engaged in a struggle over participation in the international arena. Beijing has always seen this as a zero-sum struggle, and has sought to block arrangements that it regarded as two Chinas, one China and one Taiwan, and Taiwan independence. As China achieved a dominant position, Taiwan has moved away from zero-sum struggle and instead has tried to facilitate the ROC’s participation in parallel with the PRC, but without much success.

To my mind, China’s approach to Taiwan’s participation in the life of the East Asian region has become short-sighted. Driving the ROC from the international system was always a means to a higher end: to induce unification. Since 1979, it has seen fit to convince Taiwan to agree voluntarily to end the fundamental dispute between the two sides. But for Beijing to secure Taiwan’s voluntary consent to unification, it needs the agreement not just of Taiwan’s leaders but of the public at large. Indeed, it needs a very broad consensus that unification is in the island’s long-term interests. But the Taiwan public has long sought dignity in the international community, so efforts by China to deny that dignity through a policy of marginalization only fosters anti-unification sentiment.

For China to exclude Taiwan from the East Asian and global economy is, in my mind, particularly short-sighted. If I am correct that the only way Taiwan can achieve long-term prosperity is to carry out, multi-directional economic liberalization, then China’s efforts to block that liberalization will leave Taiwan people worse off economically. That is an outcome that will undermine China’s unification goals much more than the denial of dignity. In that case, the policy of marginalization becomes self-defeating.

Authors

]]>
http://www.brookings.edu/research/testimony/2014/11/19-hong-kong-democracy-bush?rssid=bushr{0E76F102-01E5-4787-954B-48E0949A5526}http://webfeeds.brookings.edu/~/79152701/0/brookingsrss/experts/bushr~Congressional-Testimony-The-Future-of-Democracy-in-Hong-KongCongressional Testimony: The Future of Democracy in Hong Kong

Editor's Note: On November 20, Richard Bush delivered testimony before the Congressional-Executive Commission on China. Read the testimony below and watch the hearing online.

Chairman Brown, Chairman Smith, thank you for giving me the privilege to testify today. This is an important issue for U.S. policy and for me personally. I lived in Hong Kong as a teenager and followed the issue during the dozen years I was on the staff of the House Foreign Affairs Committee. In 1992, I played a staff role in the House consideration of the U.S.-Hong Kong Policy Act.

I have four general themes:

Theme Number One: Hong Kong is important to the United States and U.S.-China relations primarily because it is a test of the proposition that ethnic Chinese people are perfectly capable of democratic citizenship. Hong Kong can and should be an example of Chinese government that is representative, accountable, and effective – the sort of government that Americans would like to see emerge in China someday.

Let me stress four words in that last sentence.

Example: Chinese leaders and their citizens will be more likely to choose democracy, whatever its flaws, when they see that it works well in Chinese societies like Hong Kong and Taiwan.

Representative: for Hong Kong’s system to be representative, the candidates for major elections must offer voters a choice between all major points of view.

Accountable: elections give citizens the opportunity to confer legitimacy on leaders when they do well and hold them accountable when they do not.

Effective: The majority of Hong Kong people no doubt want a democratic system for its own sake, but they also expect that it will address the problems in their everyday lives.

There are, of course, other American interests at play in Hong Kong. About 1,200 American companies have a presence there, along with a very active American Chamber of Commerce. Approximately, 60,000 Americans live there. Many more U.S. residents of Hong Kong origin live in the United States, and make a significant contribution to our society. Still, I would rate Hong Kong’s political future as the most important U.S. interest.

Theme Number Two: the U.S.-Hong Kong Policy Act remains a sound foundation for American policy.

Its policy prescriptions remain valid, and its emphasis on the preservation of Hong Kong’s autonomy in areas that are critical to American interests is more important today than it was twenty-two years ago. I believed in 1992 and believe now that Section 202, regarding suspension of the application of U.S. laws in the event that Hong Kong’s autonomy is circumscribed, is the most important provision of the legislation.

Regarding the bill you have introduced, Mr. Chairmen, I support the resumption of the State Department reports on developments in Hong Kong. Actually, I believe that the Administration should resume the reports on its own without waiting for legislation, because that would be a good and timely signal. Whoever initiates the resumption of the report, it is important as there be a serious Congressional commitment to hold regular hearings on Hong Kong and U.S. policy.

I am agnostic on your proposal to require the President to certify that Hong Kong is sufficiently autonomous before any new laws, agreements and arrangements are applied to it. Implicit in the original law’s requirement that the President make judgments about the applicability of existing laws, agreements, and arrangements is the idea that the President make the same sort of judgment about new ones. As useful as certification might be, substantive consultations between the two branches on this matter would be just as important.

Theme Number Three: what has happened in Hong Kong over the last three months was not foreordained. The protest movement was the product of a series of choices by the parties involved, particularly the government of China. Here I would make the following sub-points.

First of all, when Beijing enacted the Basic Law for Hong Kong in 1990, it created a political system that provided extraordinary power and influence to some social groups over others. The Hong Kong business community was particularly privileged and the middle class was disadvantaged.

Second, as a result, the middle class came to recognize that public protest was the only mode of political participation open to it. And in some cases, protests actually worked to secure the withdrawal of policy initiatives that lacked public support.

Third, in my view, back in the spring and summer of this year there was available a compromise on how to elect Hong Kong’s chief executive. The approach I have in mind would have ensured that the candidates running for chief executive would likely have offered voters a choice among the range of public views on government policy. Such an approach would likely have received support from at least some in the democratic camp and therefore could have secured Legislative Council approval.

As an aside, I should say that Beijing’s choice to allow elections on a one-person-one-vote basis is an improvement over the existing arrangement of having an unrepresentative, 1,200-person committee to pick the chief executive.

The problem, of course, is China’s method for picking the candidates, and the fear of many in Hong Kong that Beijing in effect would screen candidates. The compromise that I believe was available would have liberalized the composition and processes of the nominating committee. It would have been consistent with the Basic Law (a Chinese requirement) and likely ensured a competitive election. There were Hong Kong proposals along these lines, but the decision of the PRC National People’s Congress Standing Committee on August 31st ignored them. That decision was unacceptable to a majority of Hong Kong people because it did not guarantee a competitive election in which a range of policy approaches was at play.

Fourth, the protest movement was assuredly about ensuring genuinely competitive elections and representative government, but it was also fueled by widespread public dissatisfaction over inequality of income, wealth, opportunities for good jobs, and access to affordable housing. A democratic system is seen as the solution to these problems. But even if a truly democratic system is established, if that system fails to address these problems, confidence in democracy will wane.

Fifth, the protest movement has had a number of deficiencies. It is divided among different social and generational groups, all competing for initiative. It became fixated on one means of ensuring a competitive election – civic nomination – and not on the goal itself. It has lacked a clear strategy and unity of command, which in turn has made it very difficult for it to define success and then engineer a negotiated end to the crisis.

And an end to the crisis is needed. The citizens who initially supported the protests and those that did not are increasingly unhappy about the disruption that that they must cope with every day. Some older leaders of the movement are calling on their younger comrades to end the occupation of major thoroughfares. No one should assume that the occupation can continue forever or that will Beijing will ultimately back down. The opportunity to avoid a coercive or violent crackdown – and to avoid new constraints on Hong Kong’s civil and political liberties – should be seized and seized soon.

Sixth, there is reason to believe that even within the parameters laid down by Beijing on August 31st, it still remains possible to engineer a nominating process that has a competitive character. Senior Hong Kong officials have hinted as much.

Theme Number Four: the United States Government has pursued a skillful threading of the policy needle, and it should continue to do so.

The Administration has been measured, clear, balanced, and pointed in its rhetorical statements on the current situation. I would refer you in particular to the White House statement of September 29th. The Administration has signaled its support for a genuinely democratic solution. It recognizes that if Hong Kong people can, with Beijing’s concurrence, work out a mutually acceptable solution to the challenge of constitutional reform, it will be more enduring because they were the ones that achieved it.

I will say that Washington is constrained somewhat by the reflexive tendency of the Chinese government to blame whatever trouble it is facing on outsiders, instead of recognizing its own policy failures. In the Hong Kong case, Beijing and its propaganda organs have put out the canard that the U.S. government is the “black hand” behind the current protest movement. Nothing could be further from the truth, of course, and Beijing has had to grasp at straws to make its case. I am pleased that last week in Beijing, President Obama authoritatively made clear to President Xi Jinping that the Hong Kong protest movement was home grown. Taking Beijing’s misperceptions into account is necessary because of the actions that it may take based on those misperceptions. But having taken that factor into account, the U.S. government should not refrain from doing what it believes is needed to protect and promote our interests.

Let me assure you, by the way, that our diplomats in Hong Kong are skilled professionals who understand both the promise and the problems of the current situation. Among other things, they understand what all of us should appreciate: the need to hear a range of Hong Kong views. And a range does exist. There are sensible people in both the establishment and democratic camp, people who understand the need to address all of Hong Kong’s governance problems through a political system that is representative, accountable, and effective. We should take our cues from people in Hong Kong who have an accurate appreciation of its problems and good judgment about how to solve them.

Authors

Editor's Note: On November 20, Richard Bush delivered testimony before the Congressional-Executive Commission on China. Read the testimony below and watch the hearing online.

Chairman Brown, Chairman Smith, thank you for giving me the privilege to testify today. This is an important issue for U.S. policy and for me personally. I lived in Hong Kong as a teenager and followed the issue during the dozen years I was on the staff of the House Foreign Affairs Committee. In 1992, I played a staff role in the House consideration of the U.S.-Hong Kong Policy Act.

I have four general themes:

Theme Number One: Hong Kong is important to the United States and U.S.-China relations primarily because it is a test of the proposition that ethnic Chinese people are perfectly capable of democratic citizenship. Hong Kong can and should be an example of Chinese government that is representative, accountable, and effective – the sort of government that Americans would like to see emerge in China someday.

Let me stress four words in that last sentence.

Example: Chinese leaders and their citizens will be more likely to choose democracy, whatever its flaws, when they see that it works well in Chinese societies like Hong Kong and Taiwan.

Representative: for Hong Kong’s system to be representative, the candidates for major elections must offer voters a choice between all major points of view.

Accountable: elections give citizens the opportunity to confer legitimacy on leaders when they do well and hold them accountable when they do not.

Effective: The majority of Hong Kong people no doubt want a democratic system for its own sake, but they also expect that it will address the problems in their everyday lives.

There are, of course, other American interests at play in Hong Kong. About 1,200 American companies have a presence there, along with a very active American Chamber of Commerce. Approximately, 60,000 Americans live there. Many more U.S. residents of Hong Kong origin live in the United States, and make a significant contribution to our society. Still, I would rate Hong Kong’s political future as the most important U.S. interest.

Theme Number Two: the U.S.-Hong Kong Policy Act remains a sound foundation for American policy.

Its policy prescriptions remain valid, and its emphasis on the preservation of Hong Kong’s autonomy in areas that are critical to American interests is more important today than it was twenty-two years ago. I believed in 1992 and believe now that Section 202, regarding suspension of the application of U.S. laws in the event that Hong Kong’s autonomy is circumscribed, is the most important provision of the legislation.

Regarding the bill you have introduced, Mr. Chairmen, I support the resumption of the State Department reports on developments in Hong Kong. Actually, I believe that the Administration should resume the reports on its own without waiting for legislation, because that would be a good and timely signal. Whoever initiates the resumption of the report, it is important as there be a serious Congressional commitment to hold regular hearings on Hong Kong and U.S. policy.

I am agnostic on your proposal to require the President to certify that Hong Kong is sufficiently autonomous before any new laws, agreements and arrangements are applied to it. Implicit in the original law’s requirement that the President make judgments about the applicability of existing laws, agreements, and arrangements is the idea that the President make the same sort of judgment about new ones. As useful as certification might be, substantive consultations between the two branches on this matter would be just as important.

Theme Number Three: what has happened in Hong Kong over the last three months was not foreordained. The protest movement was the product of a series of choices by the parties involved, particularly the government of China. Here I would make the following sub-points.

First of all, when Beijing enacted the Basic Law for Hong Kong in 1990, it created a political system that provided extraordinary power and influence to some social groups over others. The Hong Kong business community was particularly privileged and the middle class was disadvantaged.

Second, as a result, the middle class came to recognize that public protest was the only mode of political participation open to it. And in some cases, protests actually worked to secure the withdrawal of policy initiatives that lacked public support.

Third, in my view, back in the spring and summer of this year there was available a compromise on how to elect Hong Kong’s chief executive. The approach I have in mind would have ensured that the candidates running for chief executive would likely have offered voters a choice among the range of public views on government policy. Such an approach would likely have received support from at least some in the democratic camp and therefore could have secured Legislative Council approval.

As an aside, I should say that Beijing’s choice to allow elections on a one-person-one-vote basis is an improvement over the existing arrangement of having an unrepresentative, 1,200-person committee to pick the chief executive.

The problem, of course, is China’s method for picking the candidates, and the fear of many in Hong Kong that Beijing in effect would screen candidates. The compromise that I believe was available would have liberalized the composition and processes of the nominating committee. It would have been consistent with the Basic Law (a Chinese requirement) and likely ensured a competitive election. There were Hong Kong proposals along these lines, but the decision of the PRC National People’s Congress Standing Committee on August 31st ignored them. That decision was unacceptable to a majority of Hong Kong people because it did not guarantee a competitive election in which a range of policy approaches was at play.

Fourth, the protest movement was assuredly about ensuring genuinely competitive elections and representative government, but it was also fueled by widespread public dissatisfaction over inequality of income, wealth, opportunities for good jobs, and access to affordable housing. A democratic system is seen as the solution to these problems. But even if a truly democratic system is established, if that system fails to address these problems, confidence in democracy will wane.

Fifth, the protest movement has had a number of deficiencies. It is divided among different social and generational groups, all competing for initiative. It became fixated on one means of ensuring a competitive election – civic nomination – and not on the goal itself. It has lacked a clear strategy and unity of command, which in turn has made it very difficult for it to define success and then engineer a negotiated end to the crisis.

And an end to the crisis is needed. The citizens who initially supported the protests and those that did not are increasingly unhappy about the disruption that that they must cope with every day. Some older leaders of the movement are calling on their younger comrades to end the occupation of major thoroughfares. No one should assume that the occupation can continue forever or that will Beijing will ultimately back down. The opportunity to avoid a coercive or violent crackdown – and to avoid new constraints on Hong Kong’s civil and political liberties – should be seized and seized soon.

Sixth, there is reason to believe that even within the parameters laid down by Beijing on August 31st, it still remains possible to engineer a nominating process that has a competitive character. Senior Hong Kong officials have hinted as much.

Theme Number Four: the United States Government has pursued a skillful threading of the policy needle, and it should continue to do so.

The Administration has been measured, clear, balanced, and pointed in its rhetorical statements on the current situation. I would refer you in particular to the White House statement of September 29th. The Administration has signaled its support for a genuinely democratic solution. It recognizes that if Hong Kong people can, with Beijing’s concurrence, work out a mutually acceptable solution to the challenge of constitutional reform, it will be more enduring because they were the ones that achieved it.

I will say that Washington is constrained somewhat by the reflexive tendency of the Chinese government to blame whatever trouble it is facing on outsiders, instead of recognizing its own policy failures. In the Hong Kong case, Beijing and its propaganda organs have put out the canard that the U.S. government is the “black hand” behind the current protest movement. Nothing could be further from the truth, of course, and Beijing has had to grasp at straws to make its case. I am pleased that last week in Beijing, President Obama authoritatively made clear to President Xi Jinping that the Hong Kong protest movement was home grown. Taking Beijing’s misperceptions into account is necessary because of the actions that it may take based on those misperceptions. But having taken that factor into account, the U.S. government should not refrain from doing what it believes is needed to protect and promote our interests.

Let me assure you, by the way, that our diplomats in Hong Kong are skilled professionals who understand both the promise and the problems of the current situation. Among other things, they understand what all of us should appreciate: the need to hear a range of Hong Kong views. And a range does exist. There are sensible people in both the establishment and democratic camp, people who understand the need to address all of Hong Kong’s governance problems through a political system that is representative, accountable, and effective. We should take our cues from people in Hong Kong who have an accurate appreciation of its problems and good judgment about how to solve them.

Authors

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http://www.brookings.edu/events/2014/11/18-taiwan-municipal-elections?rssid=bushr{BF0AB033-0A7B-4606-8A08-25F2B891590D}http://webfeeds.brookings.edu/~/78943902/0/brookingsrss/experts/bushr~Taiwan%e2%80%99s-Municipal-Elections-Local-Races-with-National-ImplicationsTaiwan’s Municipal Elections: Local Races with National Implications

Event Information

Voters in Taiwan municipalities will head to the polls on November 29 to elect mayors, city councilors, and other local officials. As in other democracies, these mid-term elections are decided not only on local issues, but on national politics as well. Campaigns often reflect national issues as much as local, and the election results will be interpreted by some as a referendum on the current national government.

On November 18, the Center for East Asia Policy Studies hosted an expert discussion on various aspects of Taiwan’s 9-in-1 municipal elections. Scholars from Taiwan, the United States, and New Zealand analyzed recent polling on voter sentiment in Taiwan, assessed campaign strategies and tactics, and discussed the implications of the elections on the current government’s ability to govern and on the January 2016 president and legislative elections.

Event Information

Voters in Taiwan municipalities will head to the polls on November 29 to elect mayors, city councilors, and other local officials. As in other democracies, these mid-term elections are decided not only on local issues, but on national politics as well. Campaigns often reflect national issues as much as local, and the election results will be interpreted by some as a referendum on the current national government.

On November 18, the Center for East Asia Policy Studies hosted an expert discussion on various aspects of Taiwan’s 9-in-1 municipal elections. Scholars from Taiwan, the United States, and New Zealand analyzed recent polling on voter sentiment in Taiwan, assessed campaign strategies and tactics, and discussed the implications of the elections on the current government’s ability to govern and on the January 2016 president and legislative elections.

Audio

Transcript

Event Materials

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http://www.brookings.edu/events/2014/11/17-history-politics-policy-us-korea-alliance?rssid=bushr{5F091E6C-D425-4508-ACCE-8BC6D916B97E}http://webfeeds.brookings.edu/~/78883712/0/brookingsrss/experts/bushr~History-Politics-and-Policy-in-the-USKorea-AllianceHistory, Politics, and Policy in the U.S.-Korea Alliance

Event Information

The U.S.-ROK alliance is founded on the shared experiences of the Korean War and hopes for stability and peace on the peninsula. This history has a profound effect on the contemporary structure and public perception of the alliance. For example, in addition to strategic and technical factors, different interpretations of alliance history and visions of cooperation affect the issue of wartime operational control. At the same time, policy decisions and the handling of unforeseen events can affect the interpretation and politicization of historical issues. Understanding the nexus between history and policy is important to improving the policy process, and a lack of understanding of how the policy process works in different organizational settings and political contexts can misinform scholarship and public awareness.

On November 17, the Center for East Asia Policy Studies at Brookings hosted a conference discussing the relationship between history and U.S. policy toward Korea. The event featured a series of roundtable discussions among historians and policy practitioners representing a wide range of expertise and institutional knowledge. These “comparative conversations” provided analysis of other country cases of political division and reconciliation. Historical analysis of different regional powers’ approaches to peninsular reunification and a comparative exploration of U.S. approaches on human rights toward both Koreas and other countries concluded the conference.

Event Information

The U.S.-ROK alliance is founded on the shared experiences of the Korean War and hopes for stability and peace on the peninsula. This history has a profound effect on the contemporary structure and public perception of the alliance. For example, in addition to strategic and technical factors, different interpretations of alliance history and visions of cooperation affect the issue of wartime operational control. At the same time, policy decisions and the handling of unforeseen events can affect the interpretation and politicization of historical issues. Understanding the nexus between history and policy is important to improving the policy process, and a lack of understanding of how the policy process works in different organizational settings and political contexts can misinform scholarship and public awareness.

On November 17, the Center for East Asia Policy Studies at Brookings hosted a conference discussing the relationship between history and U.S. policy toward Korea. The event featured a series of roundtable discussions among historians and policy practitioners representing a wide range of expertise and institutional knowledge. These “comparative conversations” provided analysis of other country cases of political division and reconciliation. Historical analysis of different regional powers’ approaches to peninsular reunification and a comparative exploration of U.S. approaches on human rights toward both Koreas and other countries concluded the conference.

There was a lot of media attention given to the meetings that China’s President Xi Jinping had with President Obama and Japan’s Prime Minister Abe Shinzo on the edges of the APEC summit. Much less notice was given to the encounter that occurred between China’s and Taiwan’s policy officials responsible for their government’s relations with each other: Zhang Zhijun, director of the PRC’s Taiwan Affairs Office (TAO) and Wang Yu-chi, chairman of the ROC’s Mainland Affairs Office (MAC).

The context for these meetings was important. First of all, Taiwan’s President Ma Ying-jeou had been very eager to meet Xi Jinping at the time of APEC, but to no avail. Beijing was unwilling to agree to an APEC-related meeting, because of the international character of the venue and what that might say about the island’s international identity. While China is willing to consider a Xi-Ma meeting under other circumstances, a number of issues must be resolved before that happens (on those impediments, see my recent blog post. Consequently MAC Chairman Wang and TAO Director Zhang are the highest sitting government officials to meet each other publicly (and they only did so for the first time in February).

Second, relations across the Taiwan Strait are stuck. Since President Ma took office in 2008, Beijing and Taipei had made significant progress in normalizing, institutionalizing, and liberalizing their economic relationship. The keystone of that effort is the Economic Cooperation Framework Agreement (ECFA) concluded in June 2010, which achieved some “early-harvest” liberalization and promised future market-opening agreements on specific topics. This spring, however, the draft agreement on trade in services met a buzz-saw of opposition in Taiwan’s Legislative Yuan, led by the opposition Democratic Progressive Party and the student-led Sunflower activist movement. Approval of the agreement is thus on hold, and it is unclear when or whether it will ever be approved. The stalemate does not mean necessarily that the public as a whole has turned against deeper economic interdependence with the Mainland, but it does signify increasing difficulties in getting ratified new understanding that touch on domestic business interests.

Third, there is anxiety in both China and Taiwan about the future of their relationship. Beijing had hoped for more progress by now, including on political matters, and there is some feeling on the Mainland that the Taiwan side is very good at capturing the benefits of cross-Strait relations but unwilling to address the issues most on China’s agenda. That impatience betrays a misperception: for Taiwan, ties with China are not simply transactional; they entail more fundamental concerns about the island’s current identity and long-term future. Specifically, President Xi rattled public opinion on the island in late September when he appeared to lay new stress on Taiwan’s ultimate unification with the Mainland and avoiding a mention of the “1992 consensus,” a loose understanding that has been the basis for the interaction and agreements between the two sides during Ma Ying-jeou’s presidency. (Ma’s understanding of the 1992 Consensus is that there is one China and for Taiwan it is the Republic of China. Beijing does not accept that interpretation but it has been willing to tolerate it so far.)

So it was no doubt reassuring to at least some observers on Taiwan that the 1992 consensus was a focus of discussion in the Wang-Zhang meeting. And it should remain so. The formula has provided the basis for each side to reassure the other about its intentions, at least for the near term, and to expand the areas of cooperation where mutual benefit arguably exists. It was after Ma Ying-jeou formally accepted the 1992 Consensus in 2008 that Taiwan’s Straits Exchange Foundation (SEF) and China’s Association for Relations Across the Taiwan Strait (ARATS), which the respective governments designated to be their interface, resumed meetings after a decade of not meeting. Moreover, the 1992 Consensus has enabled SEF and ARATS to negotiate agreements on behalf of the Beijing and Taipei governments and working-level officials to interact on a regular basis.

There is actually no inconsistency in China’s position concerning Taiwan. Unification remains its ultimate goal, and one-country, two systems remains its only formula for unification. Beijing is not unaware that both the goal and the formula have little political support in Taiwan, for a variety of reasons. Although each side has its own understanding of what the 1992 Consensus means, it has been useful enough to secure what progress has occurred so far, in the areas of economics and culture. What basis the two sides might adopt should they ever move on to political and security issues is very unclear at this point. What is clear is that cross-Strait progress has been and will be a function of how much Beijing takes Taiwan public opinion into account as it formulates its policies going forward.

Authors

There was a lot of media attention given to the meetings that China’s President Xi Jinping had with President Obama and Japan’s Prime Minister Abe Shinzo on the edges of the APEC summit. Much less notice was given to the encounter that occurred between China’s and Taiwan’s policy officials responsible for their government’s relations with each other: Zhang Zhijun, director of the PRC’s Taiwan Affairs Office (TAO) and Wang Yu-chi, chairman of the ROC’s Mainland Affairs Office (MAC).

The context for these meetings was important. First of all, Taiwan’s President Ma Ying-jeou had been very eager to meet Xi Jinping at the time of APEC, but to no avail. Beijing was unwilling to agree to an APEC-related meeting, because of the international character of the venue and what that might say about the island’s international identity. While China is willing to consider a Xi-Ma meeting under other circumstances, a number of issues must be resolved before that happens (on those impediments, see my recent blog post. Consequently MAC Chairman Wang and TAO Director Zhang are the highest sitting government officials to meet each other publicly (and they only did so for the first time in February).

Second, relations across the Taiwan Strait are stuck. Since President Ma took office in 2008, Beijing and Taipei had made significant progress in normalizing, institutionalizing, and liberalizing their economic relationship. The keystone of that effort is the Economic Cooperation Framework Agreement (ECFA) concluded in June 2010, which achieved some “early-harvest” liberalization and promised future market-opening agreements on specific topics. This spring, however, the draft agreement on trade in services met a buzz-saw of opposition in Taiwan’s Legislative Yuan, led by the opposition Democratic Progressive Party and the student-led Sunflower activist movement. Approval of the agreement is thus on hold, and it is unclear when or whether it will ever be approved. The stalemate does not mean necessarily that the public as a whole has turned against deeper economic interdependence with the Mainland, but it does signify increasing difficulties in getting ratified new understanding that touch on domestic business interests.

Third, there is anxiety in both China and Taiwan about the future of their relationship. Beijing had hoped for more progress by now, including on political matters, and there is some feeling on the Mainland that the Taiwan side is very good at capturing the benefits of cross-Strait relations but unwilling to address the issues most on China’s agenda. That impatience betrays a misperception: for Taiwan, ties with China are not simply transactional; they entail more fundamental concerns about the island’s current identity and long-term future. Specifically, President Xi rattled public opinion on the island in late September when he appeared to lay new stress on Taiwan’s ultimate unification with the Mainland and avoiding a mention of the “1992 consensus,” a loose understanding that has been the basis for the interaction and agreements between the two sides during Ma Ying-jeou’s presidency. (Ma’s understanding of the 1992 Consensus is that there is one China and for Taiwan it is the Republic of China. Beijing does not accept that interpretation but it has been willing to tolerate it so far.)

So it was no doubt reassuring to at least some observers on Taiwan that the 1992 consensus was a focus of discussion in the Wang-Zhang meeting. And it should remain so. The formula has provided the basis for each side to reassure the other about its intentions, at least for the near term, and to expand the areas of cooperation where mutual benefit arguably exists. It was after Ma Ying-jeou formally accepted the 1992 Consensus in 2008 that Taiwan’s Straits Exchange Foundation (SEF) and China’s Association for Relations Across the Taiwan Strait (ARATS), which the respective governments designated to be their interface, resumed meetings after a decade of not meeting. Moreover, the 1992 Consensus has enabled SEF and ARATS to negotiate agreements on behalf of the Beijing and Taipei governments and working-level officials to interact on a regular basis.

There is actually no inconsistency in China’s position concerning Taiwan. Unification remains its ultimate goal, and one-country, two systems remains its only formula for unification. Beijing is not unaware that both the goal and the formula have little political support in Taiwan, for a variety of reasons. Although each side has its own understanding of what the 1992 Consensus means, it has been useful enough to secure what progress has occurred so far, in the areas of economics and culture. What basis the two sides might adopt should they ever move on to political and security issues is very unclear at this point. What is clear is that cross-Strait progress has been and will be a function of how much Beijing takes Taiwan public opinion into account as it formulates its policies going forward.

Not surprisingly, Hong Kong came up at the summit between U.S. President Barack Obama and Chinese President Xi Jinping. Both governments have spoken out about the continuing crisis, but the way the two leaders addressed it at today’s press conference was interesting.

In his statement, Obama was responding to a question about the wave of anti-American rhetoric and the specific charge that the United States was the “black hand” behind the Occupy protest movement. He confirmed that Hong Kong was one issue in his talks with Xi, and then said: “I was unequivocal in saying to President Xi that the United States had no involvement in fostering the protests that took place there [Hong Kong]; that these are issues ultimately for the people of Hong Kong and the people of China to decide.” The denial has the virtue of being true, but it was very important that President Obama say it, both in private and in public. He would not have provided such an “unequivocal” assurance unless he himself was confident that it was true.

Commenting on the current situation in Hong Kong, Obama then said that he had told Xi that “the United States, as a matter of foreign policy but also a matter of our values, we are going to consistently speak out on the right of people to express themselves, and encourage the elections that take place in Hong Kong are transparent and fair and reflective of the opinions of people there.” While avoiding details, he thus reaffirmed U.S. support for a political process in Hong Kong that would allow a competitive election for chief executive.

As interesting as Obama’s statement was Xi’s response to it. He did not directly dispute Obama’s statement that Washington was behind the protests, but instead addressed the issue more generally. He said that “Hong Kong affairs are exclusively China's internal affairs, and foreign countries should not interfere in those affairs in any form or fashion.” Of course, this is a standard Chinese formulation when it comes to any American activity concerning any territory that Beijing claims. Taking the two statements together, however, we have an interesting narrowing of the disagreement.

Xi said that China opposed any interference of any form in its internal affairs.

Obama denied any role in the protests, so that is no longer an issue (or shouldn’t be).

Obama promised that the United States would continue to speak out on Hong Kong issues, which Xi would say falls outside the scope of what he regards as acceptable activity. On this point, the two sides will continue to disagree.

Now that this exchange of interlocking statements has occurred, it will be interesting to see whether the Chinese propaganda apparatus will continue its “black hand” attacks on the Obama Administration, even though Xi Jinping passed up an opportunity to explicitly challenge Obama’s pledge.

On the current situation in Hong Kong, Xi Jinping stated that he had told President Obama that: Occupy Central is an illegal movement in Hong Kong; Beijing is “firmly supportive of the efforts of the Hong Kong Special Administrative Region Government to handle the situation according to law” to maintain social stability and to protect life and property; and that the rights and interests of foreign citizens and business organizations in Hong Kong would be protected. Xi did not tip his hand on how he thought the Hong Kong government should in fact “handle the situation,” but a reasonable inference is that he neither ruled out some degree of coercion nor some measure of conciliation. From the point of view of both Hong Kong people and the United States, the latter is clearly preferable.

Authors

Not surprisingly, Hong Kong came up at the summit between U.S. President Barack Obama and Chinese President Xi Jinping. Both governments have spoken out about the continuing crisis, but the way the two leaders addressed it at today’s press conference was interesting.

In his statement, Obama was responding to a question about the wave of anti-American rhetoric and the specific charge that the United States was the “black hand” behind the Occupy protest movement. He confirmed that Hong Kong was one issue in his talks with Xi, and then said: “I was unequivocal in saying to President Xi that the United States had no involvement in fostering the protests that took place there [Hong Kong]; that these are issues ultimately for the people of Hong Kong and the people of China to decide.” The denial has the virtue of being true, but it was very important that President Obama say it, both in private and in public. He would not have provided such an “unequivocal” assurance unless he himself was confident that it was true.

Commenting on the current situation in Hong Kong, Obama then said that he had told Xi that “the United States, as a matter of foreign policy but also a matter of our values, we are going to consistently speak out on the right of people to express themselves, and encourage the elections that take place in Hong Kong are transparent and fair and reflective of the opinions of people there.” While avoiding details, he thus reaffirmed U.S. support for a political process in Hong Kong that would allow a competitive election for chief executive.

As interesting as Obama’s statement was Xi’s response to it. He did not directly dispute Obama’s statement that Washington was behind the protests, but instead addressed the issue more generally. He said that “Hong Kong affairs are exclusively China's internal affairs, and foreign countries should not interfere in those affairs in any form or fashion.” Of course, this is a standard Chinese formulation when it comes to any American activity concerning any territory that Beijing claims. Taking the two statements together, however, we have an interesting narrowing of the disagreement.

Xi said that China opposed any interference of any form in its internal affairs.

Obama denied any role in the protests, so that is no longer an issue (or shouldn’t be).

Obama promised that the United States would continue to speak out on Hong Kong issues, which Xi would say falls outside the scope of what he regards as acceptable activity. On this point, the two sides will continue to disagree.

Now that this exchange of interlocking statements has occurred, it will be interesting to see whether the Chinese propaganda apparatus will continue its “black hand” attacks on the Obama Administration, even though Xi Jinping passed up an opportunity to explicitly challenge Obama’s pledge.

On the current situation in Hong Kong, Xi Jinping stated that he had told President Obama that: Occupy Central is an illegal movement in Hong Kong; Beijing is “firmly supportive of the efforts of the Hong Kong Special Administrative Region Government to handle the situation according to law” to maintain social stability and to protect life and property; and that the rights and interests of foreign citizens and business organizations in Hong Kong would be protected. Xi did not tip his hand on how he thought the Hong Kong government should in fact “handle the situation,” but a reasonable inference is that he neither ruled out some degree of coercion nor some measure of conciliation. From the point of view of both Hong Kong people and the United States, the latter is clearly preferable.

Authors

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http://www.brookings.edu/research/opinions/2014/11/07-hong-kong-china-challenges-sohn-bush?rssid=bushr{AD8460EE-B517-4A36-9138-AF4A3FAE55E0}http://webfeeds.brookings.edu/~/78278408/0/brookingsrss/experts/bushr~New-Challenges-in-the-Periphery-of-ChinaNew Challenges in the Periphery of China

Over the past several weeks, protestors have occupied streets in Hong Kong in a call for true universal suffrage in the territory. While China’s leaders seem to hope that the crisis will soon resolve itself, this is wishful thinking. The Hong Kong crisis is fueled in part by the interaction of two macro-factors which are beyond China’s control–globalization and localization–and it is merely one manifestation of this looming challenge. Against this bleak backdrop, there is still a way forward for Hong Kong and for China itself.

Globalization has been the dominant trend in the world economy for more than two decades. A major actor in this process is China, both as a market for raw materials and as the supplier of finished goods for overseas markets. But globalization has generated both winners and losers. It has contributed to economic growth in Asia and beyond, it has also created deep concerns among China’s smaller neighbors about increasing economic and political asymmetry. Some groups who have not greatly benefited from socio-economic integration with China have started to resist it, triggering localization movements. As globalization often takes control and decision-making authority away from local communities, actual or potential losers around China’s periphery tend to invoke local identity, autonomy, and protectionism as their response to increasing transnational flows of goods and people. Localization advocates argue for small-scale measures to deal with challenges of income generation and inequality, environmental degradation, education gaps, and public health problems. Localization efforts have been occurring to varying degrees in many areas of China’s periphery, including Hong Kong, Taiwan, Korea, Mongolia, Vietnam, Singapore, Burma, Laos, and China’s inner periphery such as Xinjiang and Tibet.

Hong Kong represents the front line of China-related globalization and localization. Enhanced ties with China have been a bonanza for Hong Kong’s trade, finance, and real estate industries, but economic inequality, the cost of housing, and fear of interference by Beijing have surged. Hong Kong’s protesters desire a proper say in local governance in order to better face these challenges. They want their chief executive to be accountable to the people of Hong Kong, not to Beijing bidding or a handful of pro-Beijing tycoons.

While it is not fair to blame Beijing for all of the problems in Hong Kong, Beijing could be helpful in addressing them by recognizing that a legitimate local government could help to address local problems in a way that the national government can not. Legitimizing the electoral system is by no means a panacea for the problems in Hong Kong, but is an important element of good governance. A Hong Kong chief executive whom a majority of Hong Kong residents view as the best leader, rather than the least objectionable, would be likely to exercise more legitimate, accountable and responsive leadership in tackling the problems arising from the contending forces of globalization and localization.

Beijing could permit more room for free and open elections in Hong Kong. While it may be a difficult step, it is better than other options such as suppression and deadlock. Protracted stalemates will leave the underlying grievances of the protesters untouched and tensions inevitably will flare up again. In a worst-case scenario, use of force to end current or future protests could have catastrophic effects on Hong Kong and on China.

We should accept that China has a right to its own system of government. Nonetheless, a political experiment in Hong Kong would be useful not only for Hong Kong but also for China’s broader, long-term political reform. Hong Kong is an ideal political laboratory for China. It has strong institutions and a strong rule-of-law culture, and Beijing can easily justify its flexible or exceptional approach to Hong Kong through the “one country, two systems” formula. Beijing can control the pace and extent of political reform in the mainland while evaluating the results in Hong Kong. This approach is consistent with the experimentation in economic policy that has been a pervasive feature of China’s economic reform during the post-Mao period.

The Hong Kong problem is the leading edge of an unprecedented challenge to the Chinese leadership: tension between globalization and localization is likely to increase and eventually to manifest inside China. Therefore it is also a great opportunity for China’s long-overdue political reform. It is time for Beijing to come up with far-sighted responses to emerging problems in its periphery, and more free and open elections for Hong Kong is the way to begin.

Authors

Over the past several weeks, protestors have occupied streets in Hong Kong in a call for true universal suffrage in the territory. While China’s leaders seem to hope that the crisis will soon resolve itself, this is wishful thinking. The Hong Kong crisis is fueled in part by the interaction of two macro-factors which are beyond China’s control–globalization and localization–and it is merely one manifestation of this looming challenge. Against this bleak backdrop, there is still a way forward for Hong Kong and for China itself.

Globalization has been the dominant trend in the world economy for more than two decades. A major actor in this process is China, both as a market for raw materials and as the supplier of finished goods for overseas markets. But globalization has generated both winners and losers. It has contributed to economic growth in Asia and beyond, it has also created deep concerns among China’s smaller neighbors about increasing economic and political asymmetry. Some groups who have not greatly benefited from socio-economic integration with China have started to resist it, triggering localization movements. As globalization often takes control and decision-making authority away from local communities, actual or potential losers around China’s periphery tend to invoke local identity, autonomy, and protectionism as their response to increasing transnational flows of goods and people. Localization advocates argue for small-scale measures to deal with challenges of income generation and inequality, environmental degradation, education gaps, and public health problems. Localization efforts have been occurring to varying degrees in many areas of China’s periphery, including Hong Kong, Taiwan, Korea, Mongolia, Vietnam, Singapore, Burma, Laos, and China’s inner periphery such as Xinjiang and Tibet.

Hong Kong represents the front line of China-related globalization and localization. Enhanced ties with China have been a bonanza for Hong Kong’s trade, finance, and real estate industries, but economic inequality, the cost of housing, and fear of interference by Beijing have surged. Hong Kong’s protesters desire a proper say in local governance in order to better face these challenges. They want their chief executive to be accountable to the people of Hong Kong, not to Beijing bidding or a handful of pro-Beijing tycoons.

While it is not fair to blame Beijing for all of the problems in Hong Kong, Beijing could be helpful in addressing them by recognizing that a legitimate local government could help to address local problems in a way that the national government can not. Legitimizing the electoral system is by no means a panacea for the problems in Hong Kong, but is an important element of good governance. A Hong Kong chief executive whom a majority of Hong Kong residents view as the best leader, rather than the least objectionable, would be likely to exercise more legitimate, accountable and responsive leadership in tackling the problems arising from the contending forces of globalization and localization.

Beijing could permit more room for free and open elections in Hong Kong. While it may be a difficult step, it is better than other options such as suppression and deadlock. Protracted stalemates will leave the underlying grievances of the protesters untouched and tensions inevitably will flare up again. In a worst-case scenario, use of force to end current or future protests could have catastrophic effects on Hong Kong and on China.

We should accept that China has a right to its own system of government. Nonetheless, a political experiment in Hong Kong would be useful not only for Hong Kong but also for China’s broader, long-term political reform. Hong Kong is an ideal political laboratory for China. It has strong institutions and a strong rule-of-law culture, and Beijing can easily justify its flexible or exceptional approach to Hong Kong through the “one country, two systems” formula. Beijing can control the pace and extent of political reform in the mainland while evaluating the results in Hong Kong. This approach is consistent with the experimentation in economic policy that has been a pervasive feature of China’s economic reform during the post-Mao period.

The Hong Kong problem is the leading edge of an unprecedented challenge to the Chinese leadership: tension between globalization and localization is likely to increase and eventually to manifest inside China. Therefore it is also a great opportunity for China’s long-overdue political reform. It is time for Beijing to come up with far-sighted responses to emerging problems in its periphery, and more free and open elections for Hong Kong is the way to begin.

Event Information

This November, after focusing on foreign policy concerns around the globe and congressional midterm elections at home, President Barack Obama will travel to Beijing to attend the APEC Economic Leaders’ Meeting in hopes of preserving and enhancing one of his key foreign policy achievements—the rebalance to Asia. Obama’s trip to China will be his first since 2009, and in those intervening five years the bilateral relationship has become increasingly complicated, with tensions spanning a wide range of issues from maritime disputes to cybersecurity to the pace of China’s economic reforms. While both countries agree that a “New Type of Great Power Relations" is needed, it is still not clear what such a relationship entails. President Obama’s trip to China will offer a critical opportunity to shape the U.S.-China relationship and seize on the cooperative spirit of the APEC meeting to strengthen the rebalance to Asia.

On Novemver 5, the John L. Thornton China Center at the Brookings Institution hosted a full-day conference with two keynote addresses and four panels about the economic, environmental, political, and security implications of President Obama’s trip to China for the 2014 APEC summit and his interactions with President Xi Jinping.

Event Information

This November, after focusing on foreign policy concerns around the globe and congressional midterm elections at home, President Barack Obama will travel to Beijing to attend the APEC Economic Leaders’ Meeting in hopes of preserving and enhancing one of his key foreign policy achievements—the rebalance to Asia. Obama’s trip to China will be his first since 2009, and in those intervening five years the bilateral relationship has become increasingly complicated, with tensions spanning a wide range of issues from maritime disputes to cybersecurity to the pace of China’s economic reforms. While both countries agree that a “New Type of Great Power Relations" is needed, it is still not clear what such a relationship entails. President Obama’s trip to China will offer a critical opportunity to shape the U.S.-China relationship and seize on the cooperative spirit of the APEC meeting to strengthen the rebalance to Asia.

On Novemver 5, the John L. Thornton China Center at the Brookings Institution hosted a full-day conference with two keynote addresses and four panels about the economic, environmental, political, and security implications of President Obama’s trip to China for the 2014 APEC summit and his interactions with President Xi Jinping.